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Author: 


nn,  Sir  Ernest  John 
Pickstone 

Title: 

The  trade  of  to-morrow 


Place: 


New  York 

Date: 

1918 


q4-^;^oo;^-ii 


MASTER    NEGATIVE   # 


COLUMBIA  UNIVERSITY  LIBRARIES 
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ORIGINAL  MATERIAL  AS  FILMED  -    EXISTING  BIBLIOGRAPHIC  RECORD 


}  SUSINESS 

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Benn,  Gir  Ernest  John  Pickstone,  bart.,   1875- 
The  trade  of  to-norrow,   by  Ernent  J.P.Benn... 

New  York,  Dutton,  1918. 
232  p.     18^:  cm. 


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THE  TRADE  OF  TO-MORROW 


V 


THE    TRADE    OF 
TO-MORROW 


BY 


ERNEST    J.    P.     BENN 

Author  of  "Trade  as  a  Science." 


NEW    YORK 
E.    P.    DUTTON    &    CO. 

681,   FIFTH   AVENUE 
1918 


i 


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AUTHOR'S    NOTE. 


A  FRIEND,  who  has  been  good  enough  to  read  my 
manuscript,  and  whose  judgment  on  these  matters 
is  better  than  mine,  complains  that  this  book  gives 
the  impression  that  I  am  interested  only  in  material 
prosperity.  I  insist  all  through  on  the  necessit}^ 
for  production,  and  appear  to  argue  that  the  mere 
multipHcation  of  things  is  in  itself  a  measure  of 
human  progress. 

This  criticism,  which  is  perfectly  just,  prompts 
me  to  insert  this  note,  and  to  say  that  I  should 
be  sorry  even  to  appear  to  believe  that  human 
development  depended  entirely,  or  even  chiefly, 
upon  material  progress.  I  am  fully  conscious  that 
right  through  this  book  I  lay  imdue  emphasis 
upon  quantity,  more  production,  an  emphasis 
which  I  think  is  justified  in  view  of  the  urgent  need 
of  the  nation  for  the  creation  of  wealth.  It  will, 
however,  be  obvious  to  the  thoughtful  reader 
that  Trade  Councils  constituted  in  the  way  here 
suggested  will  give  great  opportunities  for  the  pro- 
motion of  the  human,  the  artistic,  and  the  quality 
sides  of  industry. 

It  will,   further,  be  evident  that  such  Councils 


II 


6  AUTHOR'S  NOTE 

could  settle  the  underlying  problems  of  the  labour 
difficulty,  which  the  Observer  calls  a  spiritual 
revolt.  They  would  place  the  workman  on  an 
equal  footing  with  the  master  in  the  supreme 
control  of  industry,  while  interfering  in  no  way 
with  the  independence  of  either. 

But  having  said  so  much,  I  do  contend  that  there 
is  a  pressing  need  for  greater  attention  to  the  sordid 
side  of  progress  with  which  I  deal  in  this  book. 
There  has  in  the  past  been  far  too  much  preaching 
of  high  ideals  without  regard  to  worldly  needs,  a 
fact  which  explains  the  comparative  failure  of  all 
ethical  appeals  to  the  multitude.  Social  reformers 
of  every  kind  would  find  better  ground  for  their 
work  if  the  material  inadequacies  of  our  present 
arrangements  could  be  eUminated. 


E.  J.  P.  B. 


8.  BouvERiE  Street.  E.C. 
July,  19 17. 


CONTENTS. 


CHAPTER 

PAOK 

author's  note 

- 

5 

I. 

CONCLUSIONS     -                -                - 

- 

9 

II. 

ADVICE  TO  RECONSTRUCTORS     - 

- 

19 

III. 

THE  CASE  FOR  DEVOLUTION 

- 

28 

IV. 

THE  OFFICIAL  AND  THE  BUSINESS 

MAN 

39 

V. 

"  AUDACITY  "    IN    TRADE 

- 

45 

VI. 

THE    THIRD    PARTNER    - 

- 

57 

VII. 

GETTING  RID  OF  THE   SHIBBOLETHS      - 

72 

VIII. 

THE  OUTCRY  FOR  ORGANISATION 

- 

79 

IX. 

DIFFERENT   SCHEMES    - 

- 

89 

s?              X. 

LABOUR                -               -               - 

- 

•99 

s           XI. 

ASSOCIATIONS   OF   TO-DAY 

«• 

112 

^     XII. 

TRADE  ORGANISATIONS  ABROAD 

- 

122 

^    XIII. 

THE      BOARD     OF      TRADE      AND 

THE 

MINISTRY  OF   INDUSTRY  AND 

COM- 

MERGE          -               -               - 

- 

133 

XIV. 

OUTPUT 

- 

140 

XV. 

EDUCATION   AND   RESEARCH      - 

- 

155 

XVI. 

STATISTICS           -                -                - 

- 

165 

XVII. 

FISCAL   REFORM 

- 

179 

XVIII. 

EXPORT                -               -               - 

- 

189 

XIX. 

SUNDRY   QUESTIONS       - 

- 

202 

XX. 

A   TRADE   ELECTION 

- 

206 

XXI. 

RECOMMENDATIONS 

7 

- 

222 

1 


The  Trade  of  To-Morrow. 


CHAPTER  I. 


CONCLUSIONS. 


"  Get  a  really  new  world." — Lloyd  George. 

Frankly,  the  subject  to  which  I  have  the  temerity 
to  return  is  overwhelming.  It  is  not  one  subject 
at  all :  it  comprises  a  thousand  separate  subjects. 
Every  point  in  it  is  full  of  controversy,  and  little 
that  one  can  say  has  any  hope  of  finding  general 
agreement. 

Yet  my  mission  is  a  very  simple  one.  It  can  be 
expressed  in  a  sentence.  It  is  to  plead  for  the 
organisation  of  the  trades  of  this  country  in  such 
a  way  that  the  three  parties  interested — (i)  The 
State,  (2)  the  workman,  (3)  the  capitalist — may  be 
able  together  to  develop  them  to  their  fullest  extent. 

The  first  question  which  arises  is  this  :  Why 
bother  to  organise  trade  at  all  ?  We  have  done 
very  well  in  the  past,  and  why  not  leave  things 
alone  ? 

There  are  many  reasons  why  improvements  must 

9 


10 


THE  TRADE  OF  TO-MORROW 


be  made,  some  of  them  immediate  and  passing, 
others  fundamental  and  more  important. 

Among  the  former  are  such  matters  as  : 
Raising  revenue ; 
Repairing  the  wastage  of  war  ; 
Providing  work  for  all  upon  demobilisation  ;  and 
Foreign  competition. 

But  among  the  fundamental  and  more  important 
considerations  to  be  reckoned  with  are  these  : — 

The  increasing  needs  of  the  population  demand 
more  goods,  and  the  march  of  civilisation  demands 
less  work,  and  the  two  can  only  be  secured  by  better 
arrangements. 

It  is  one  of  our  elementary  duties  to  see  that  in 
our  industrial  scheme  there  is  as  little  waste  as 
possible  either  of  material  or  effort. 

Trade  is  a  very  large  subject,  far  too  complex 
for  any  one  mind  to  grasp  properly.  It  is  a  subject 
where  one  can  very  easily  become  lost  in  detail. 
The  problems  of  trade  cannot  be  solved  by  a  few 
deputations  to  Ministers,  or  even  by  the  hundreds 
of  committees  which  the  Government  are  reported 
to  have  appointed.  They  call  for  the  estabUsh- 
ment  of  powerful  and  permanent  machinery, 
conceived  upon  a  big  plan.  Industry  should  be 
admitted  to  a  place  in  the  Constitution. 

There  are  28,678  local  authorities  in  the  United 
Kingdom  to  attend  to  sewers,  cemeteries,  street 
lighting,  and  other  such  details.  The  control  of 
our  trade  is  surely  worth  at  least  as  much 
attention.      In  these    pages  my  object  is  to  help 


CONCLUSIONS 


II 


in  promoting  the  organisation  of  our  trades  under 
the  protection  of  the  State. 

In  developing  my  argument  for  representative 
Trade  Unions,  Trade  Associations,  and  Trade 
Councils,  I  shall  refer  to  a  variety  of  subjects,  not 
in  order  to  express  any  opinion  about  them  or  influ- 
ence the  discussion  of  them  in  any  way,  but  simply, 
and  I  think  this  is,  forthe  moment,  more  important, 
to  show  that  they  cannot  be  satisfactorily  handled 
or  discussed  until  our  trades  are  made  articulate, 
are  given  a  corporate  existence  and  a  voice,  which 
is  not  the  case  to-day. 

In  inviting  attention,  therefore,  to  such  questions 
as  output,  foreign  competition,  tariffs,  labour, 
wages,  profits,  exportation,  economical  production, 
or  any  of  the  numerous  aspects  of  the  trading 
problem,  I  do  so,  not  to  dogmatise  upon  them,  but 
only  to  insist  that  these  problems  are  not  capable 
of  solution  by  politicians  or  newspaper  writers, 
and  to  emphasise  the  need  for  the  creation  of  the 
proper  authorities  to  deal  with  them. 

The  development  of  industry  sounds  simple 
enough,  and  is  simple  enough  if  suitable  machinery 
is  secured  for  the  purpose.  The  problem  is  easiest 
in  its  broadest  aspect :  it  is  in  the  details  that  it 
becomes  embarrassing.  We  decide  to  multiply  by 
ten  our  output  of  shells,  and  a  paper  plan  is  made 
in  a  few  minutes  ;  but  in  practice  it  requires  as 
many  hotels,  offices,  and  hutments  as  would  make 
a  respectable  city,  and  a  Defence  of  the  Realm  Act, 
and  a  series  of  Munition  Acts  to  boot.     Presently 


12 


THE  TRADE  OF  TO-MORROW 


CONCLUSIONS 


13 


we  shall  require  to  multiply  our  output  of  more 
peaceful  commodities,  and  there  will  be  no  Acts 
to  help  us.  What  plan  can  we,  therefore,  adopt  ? 
What  are  the  ways  and  means  that  are  necessary 
to  effect  our  object  ? 

When  the  war  is  over  we  shall  be  faced  with  the 
necessity  of  raising  to  its  highest  point  the  produc- 
tive capacity  of  the  nation.  That  is  a  proposition 
which  nobody  will  deny.  Every  citizen,  worthy  of 
the  name,  will  require  to  feel  assured  that  he  or  she 
is  contributing  the  maximum  possible  to  the  relief 
and  removal  of  the  burdens  which  the  war  has  put 
upon  us.  According  as  we  arrange  ourselves  well 
or  badly,  so  will  the  results  of  our  individual  efforts 
be  great  or  small. 

General  statements  of  this  kind  are  easy,  and  if 
the  writing  of  platitudes  and  the  expression  of 
pious  hopes  could  effect  the  salvation  of  the  country 
and  the  Empire,  then  surely  every  Briton  must  feel 
perfectly  happy  and  safe  to-day.  As,  however,  this 
is  not  the  case,  it  becomes  necessary  to  do  something 
— and  that  is  when  the  trouble  begins.  A  thousand 
voices  are  endeavouring  to  explain  at  the  same 
moment.  Each  voice  has  a  message,  each  is  worthy 
of  a  hearing,  but  among  "  the  tumult  and  the 
shouting  "  all  are  ineffective. 

In  the  endeavour  to  gain  a  hearing  amid  such  a 
babel,  I  propose  to  adopt  an  unorthodox  method 
of  argument. 

I  start  with  my  conclusions.  These  can  be  stated 
quite  briefly  and  plainly,  and  when  the  reader  has 


studied  the  next  few  paragraphs  he  will  have 
gathered  the  gist  of  all  I  have  to  say.  The  rest  of 
the  book  is  mere  "  chatter,"  "  chatter,"  which  I 
venture  to  hope  many  may  find  of  interest,  upon 
some  of  the  thousands  of  issues  raised  by  this  enor- 
mous problem  of  trade,  industry,  and  production. 

The  chatter  is  intended  to  lead  the  reader  to 
think,  as  I  do,  that  the  subject  is  too  complicated 
and  the  interests  involved  are  too  ^eat  for  any 
Government  to  attempt  to  handle,  and  that  the 
only  thing  the  Government  can  do  is  to  adopt  a  bold 
scheme  of  devolution.  The  control  of  industry  must 
be  delegated   to  authorities  in  each  trade. 

British  trade  is  capable  of  indefinite  expansion. 
This  is  impossible  on  1914  lines  and  equally  impos- 
sible on  the  lines  that  we  have  adopted  since  1914, 
great  central  Government  schemes  run  by  ofiicials. 
It  depends  upon  a  proper  balancing  of  the  various 
forces  engaged,  the  workman,  the  capitalist,  the 
State. 

Throughout  this  book  I  constantly  refer  to  three 
parties  concerned  with  industry.  The  rough  divi- 
sion into  three  is  convenient,  although  it  would  be 
more  correct  to  subdivide  further  and  speak  of 
(i)  the  consumer,  (2)  the  nation,  (3)  the  workman, 
(4)  the  salesman,  (5)  the  management,  (6)  the 
employer,  (7)  the  capitalist.  All  these  parties 
require  special  classification  and  separate  treatment 
in  any  finished  scheme. 

In  the  ordinary  way  some  apology  and  explana- 
tion would  be  necessary  for  the  production  of  two 


\    1 1  (  1 

I  i; 


14 


THE  TRADE  OF  TO-MORROW 


CONCLUSIONS 


15 


books  on  the  same  subject  within  the  period  of  a 
year.  "  Trade  as  a  Science,"  while  it  covered,  so 
far  as  the  details  of  the  subject  are  concerned,  a 
different  ground  for  the  most  part  from  this  present 
volume,  yet  contained  the  same  arguments  and  had 
the  same  purpose.  But,  having  regard  to  the 
importance  of  the  subject  and  also  to  certain  develop- 
ments which  will  be  apparent  to  the  reader  in  the 
writer's  views  and  plans,  there  is  perhaps  sufficient 
excuse  for  this  further  intrusion  into  the  debate. 

Since  the  publication  of  "Trade  as  a  Science," 
some  scores  of  books  have  appeared,  and  numbers 
of  schemes  have  been  put  forward  in  the  effort 
to  help  along  the  reconstruction  through  which  we 
are  passing.  It  is  no  disparagement  to  any  of  these 
to  say  that  most  of  them  are  concerned  with  what 
I  regard  as  the  details  of  the  problem,  and  all  serve 
to  emphasise  the  view  here  advanced,  that  the 
only  way  for  the  nation  to  deal  with  the  matter  is 
to  adopt  some  great  scheme  of  decentralisation  and 
set  up  in  this  way  adequate  machinery  to  under- 
take so  enormous  a  task. 

The  following  is,  therefore,  in  bare  rough  outline 
the  machinery  which  the  present  writer  suggests 
as  necessary. 

(i)  A  Minister  of  Commerce  and  Industry. 

A  Minister  of  Commerce  should  be  appointed  for 
the  purpose  of  fostering  and  facilitating  the  self- 
advancement  of  British  Trade. 

To  ask  for  another  Minister  at  a  moment  when  we 


are  so  overburdened  with  this  type  of  functionary 
requires  a  very  strong  case,  but  that  case  is  self- 
evident  when  it  is  remembered  that  in  the  whole 
crowd  of  statesmen  who  now  look  after  our  welfare 
there  is  not  one  who  accepts  any  real  responsibihty 
for  such  matters  as  output,  export,  economical 
production,  science  in  industry,  or  education  as 
applied  to  trade. 

The  duties  of  the  Minister  of  Commerce  would  be 
chiefly  concerned  with  the  setting  up  of  Trade 
Councils  within  the  different  industries,  and  the 
regulation  and  assistance  of  these  bodies  when 
created. 

(2)  Trade  Councils. 

There  should  be  created  in  connection  with  every 
industry  a  Trade  Council  to  which  the  Government 
would  delegate  every  question  connected  with  that 
industry. 

These  Councils  would  relieve  the  Government  of 
all  details,  in  the  same  way  that  the  County  Councils 
undertake  the  detail  work  connected  with  their 
localities.  They  would  be  statutory  bodies  having 
a  similar  status  to  the  County  Councils.  Powers 
should  be  conferred  upon  them  from  time  to  time 
by  Act  of  Parhament  or  Orders  in  Council,  placing 
in  their  hands  necessary  work  as  it  arises,  in  exactly 
the  same  way  that  powers  are  now  conferred  upon 
local  authorities  as  new  needs  come  to  light. 

These  Trade  Coimcils  should  consist  of  elected 
representatives  of  the  Trade  Associations  and  the 


m ' 


i 


i 


i6 


THE  TRADE  OF  TO-MORROW 


Trade  Unions,  one-third  of  the  members  being 
drawn  from  Q^ch  source,  as  explained  below.  The 
remaining  third  would  be  composed  of  the  official 
element,  representatives  of  Government  depart- 
ments, men  of  science,  and  nominees  of  other 
bodies  having  an  interest  in  the  trade. 

(3)  An  Industrial  Franchise. 

The  one  weak  spot  apparent  in  all  attempts  to 
deal  with  trading  matters  is  the  absence  of  repre- 
sentative responsibility.  This  point  will  be  argued 
later.  It  can  be  overcome  by  an  extension  of 
the  franchise  to  cover  trading  interests.  Every 
citizen  now  has  the  ParUamentary  vote  and  the 
municipal  vote,  and  he  should  be  given  in  addition  a 
trading  or  industrial  vote.  This  vote  would  be 
available  for  use  in  connection  with  a  Trade  Union 
or  a  Trade  Association.  Thus  each  man  and  woman 
would  have  a  direct  voice  in  the  three  great  branches 
of  national  administration  :  (a)  Imperial  Govern- 
ment, (6)  Local  Government,  (c)  Industrial  Govern- 
ment. 

(4)  The  Trade  Union. 

The  introduction  of  a  new  electoral  principle  as 
explained  above  would  give  to  every  working  man 
the  right  to  be  a  voting  member  of  some  Trade 
Union,  and  the  principle  of  compulsory  membership 
of  a  union,  over  which  labour  has  fought  so  strenu- 
ously in  recent  years,  would  thus  receive  a  measure 
of  acknowledgment.    The  unions  themselves  would 


CONCLUSIONS 


17 


secure  a  semi-official  status  which  need  not  in  the 
least  degree  interfere  with  their  independence.  The 
Trade  Union  of  an  individual  industry  thus  estab- 
lished upon  a  comprehensive  and  thoroughly  repre- 
sentative basis,  would  elect  periodically  its  share 
of  the  members  of  that  industry's  Trade  Council.  ) 

(5)  The  Trade  Association. 

In  exactly  the  same  way  as  with  the  Trade  Union, 
r  the  Trade  Association  would  receive  a  measure  of 
State  recognition,  and  every  employer  in  a  particular 
industry  would  have  the  right  of  membership  or  a 
right  to  vote  in  connection  with  the  affairs  of  the 
association.  This  need  not  necessarily  mean  full 
membership  of  the  association.  The  Trade  Associa- 
tion could  continue  as  at  present  to  undertake  special 
work  which  interested  full  subscribing  members, 
but  it  would  assume  a  larger  responsibility  towards 
the  whole  industry.  The  full  body  of  electors  in 
that  industry  would  have  the  right  to  vote  in  the 
affairs  of  the  association  so  far  as  they  concerned 
public  functions  put  upon  that  association.  These 
associations  would  then  elect  their  proportion  of 
the  members  of  the  Trade  Councils. 

The  creation  of  machinery  on  some  such  lines  as 
these  would  provide  the  State  for  the  first  time  with 
a  means  of  ascertaining  the  views  of  the  industry. 
It  would  also  provide  industry  for  the  first  time  with 
a  means  of  making  its  voice  heard.  It  would  remove 
from  the  sphere  of  politics  dozens  of  questions  which 
are  domestic  trade  questions  and  not  matters  for 

B 


l8  THE  TRADE  OF  TO-MORROW 

Imperial  Parliament.  It  would  enable  the  State, 
through  its  Minister  of  Commerce,  to  take  an  active 
interest  in  and  a  proper  responsibility  for  the 
development  of  each  industry.  It  would,  in  my 
judgment,  give  an  impetus  and  a  strength  to  trade 
and  industry  which  is  all  that  is  necessary  to  enable 
it  to  meet  the  unprecedented  burdens  put  upon  the 
country  by  the  war,  and  which  must  be  met  in  the 
long  run  by  the  trading  community. 

This  book  is  not  a  treatise  on  economics.  The 
only  argument  in  it  is  an  argument  for  the  admission 
of  industry  to  a  place  in  the  Constitution  and  its 
organisation  upon  a  representative  basis.  It  comes 
into  the  class  of  propagandist  literature  and  expresses 
the  somewhat  incoherent  views  of  that  peculiar 
creature  commonly  known  as  the  "  business  man." 
It  will  probably  create  a  condition  of  confusion  in 
the  mind  of  the  reader,  and  in  that  way  wiU  serve 
one  of  its  objects.  If  it  helps  to  show  how  confused, 
complicated,  and  immense  are  the  problems  of 
industrial  development,  it  will  strengthen  the  argu- 
ment for  decentralisation,  devolution,  and  delega- 
tion. It  is  for  the  economists  and  politicians  to 
study  and  criticise  these  proposals. 


CHAPTER  11. 


ADVICE  TO  RECONSTRUCTORS. 

Starting  with  the  Reconstruction  Committee  of 
the  Cabinet,  there  are  literally  hundreds  of  bodies 
debating  and  discussing  the  problems  of  reconstruc- 
tion, and  it  may  not,  therefore,  be  out  of  place  to 
put  down  a  few  of  the  leading  considerations  which 
all  these  people  should  have  constantly  before  them, 
if  their  conclusions  are  to  be  of  any  value. 

Some  folk,  especially  those  who  have  enjoyed  a 
brief  spell  of  authority— and  these  are  tens  of 
thousands — have  become  so  used  to  war  conditions 
and  methods  as  to  forget  that  this  is  the  land  of 
liberty.  It  is  well  to  remind  such  that,  when  the 
needs  of  war  are  passed,  this  old  country  will  not 
tolerate  a  continuation  of  anything  in  the  nature 
of  the  numerous  permits,  controls,  exemptions, 
licences,  prohibitions,  and  badges,  to  which  the 
ordinary  civilian  has  willingly  submitted  since  1914. 

In  order  to  defeat  Prussian  militarism  we  have  had 
to  adopt  most  of  the  evil  methods  against  which  we 
are  fighting.  We  are  subject  not  only  to  miUtary 
despotism,  but  to  a  far  worse  civil  despotism,  which, 

19 


20 


THE  TRADE  OF  TO-MORROW 


W' 


nevertheless,  we  welcome  as  a  means  of  winning  the 
war.  But  if  all  the  little  Jacks-in-office  who  now 
control  us  imagine  that  their  power  will  last  when 
the  war  is  over,  they  are  mistaken.  The  nation 
has  had  enough  forms  to  fill  up  and  enough  returns 
to  make  to  last  it  for  many  years  to  come. 

Most  of  the  new  ministries,  which  have  sprung  up 
like  mushrooms,  must  come  to  an  end  when  the 
transient  need  has  passed.  A  cursory  glance  at 
the  construction  of  these  bodies  is  sufficient  to  prove 
this.  The  Prime  Minister  appoints  some  well-known 
man  as,  let  us  say,  Minister  of  Building.  Fifty 
leading  architects  and  builders— recognised  experts 
— immediately  offer  their  services.  An  organisa- 
tion has  to  be  improvised  within  a  few  weeks.  The 
Charity  Commissioners,  the  Governor  of  the  Isle 
of  Man,  the  King's  Proctor,  the  Duchy  of  Lancaster, 
and  the  Lee  Conservancy  Board  kindly  lend  the 
services  of  some  of  their  dereUct  officials,  and  in 
order  that  the  new  office  may  live  up  to  all  the  best 
traditions  of  red  tape  the  Steward  and  Clerk  of 
Halemotes  of  the  County  Palatine  is  installed  as 
"Establishment"  Officer. 

These  persons  then  proceed  to  appoint  a  thousand 
clerks  and  messengers — a  thousand  is  always  the 
minimum.  When  they  have  exhausted  the  appU- 
cants  with  influence  the  public  swarms  in.  There 
is  no  examination,  no  test  of  quahfication.  With 
this  motley  crew  the  Minister  of  Building  manages 
somehow  to  accomplish  the  task  for  which  he  was 
appointed.    The  work  costs  five  times  as  much  as 


ADVICE  TO  RECONSTRUCTORS         21 

it  is  worth,  hardship  and  injustice  are  scattered 
broadcast,  blunders  innumerable  are  made — but 
we  are  at  war,  and  this  sort  of  thing  is  the  best  we 

can  do. 

As  soon  as  the  rush  of  work  connected  with  the 
Building  regulations  is  over,  the  army  of  officials 
in  the  Hotel  Royal  begin  to  think  of  the  future. 
The  quarters  are  pleasant,  the  pay  is  good,  the  work 
unexacting,  and  the  taste  of  power  deUcious.  So  a 
Reconstruction  Committee  is  set  up  to  prepare 
great  schemes  for  the  futiure.  But  when  the  war 
is  over  the  fifty  leading  experts,  who  are  mostly 
giving  their  services,  will  hasten  back  to  their  own 
affairs,  and  the  brains  and  push  and  energy  of  the 
Ministry  will  be  gone.  This,  of  course,  does  not 
worry  the  professional  official  in  the  least :  he  will 
be  glad  to  see  the  back  of  these  hustling  persons, 
so  that  he  can  establish  himself  and  his  minions 
behind  a  permanent  parapet  of  forms  and  jackets, 
minutes  and  memoranda,  imprests  and  precedents, 
all,  of  course,  in  triplicate. 

Let  us  reconstruct  by  all  means.  Indeed,  if  we 
are  to  live,  we  must  reconstruct,  but  at  all  costs  the 
fatal  blunder  must  be  avoided  of  construction  upon 
the  flimsy  foundation  of  improvised  war-time  make- 
shifts. All  these  hurriedly  conceived  and  badly 
constituted  Ministries,  ControUerships,  and  Director- 
ates must  be  swept  clean  away,  and  if  good  is  to  be 
done  a  new  start  made  upon  surer  and  more  solid 
foundations. 

"  We  are  living,"  says  a  leading  manufacturer. 


22  THE  TRADE  OF  TO-MORROW 

"  under  a  condition  of  State  interference  such  as  no 
man  dreamed  of  as  possible  before  the  war.  Bureau- 
cracy as  we  have  got  it  to-day.  and  as  it  will  remain 
after  the  war,  is  going  to  be  a  terrible  danger  unless 
controlled.  Employers  and  workpeople  are  all 
gomg  to  be  the  slaves  of  the  official." i 

"  There  is  a  danger  which  threatens  freedom  in 
the  demand  that  the  State  should  step  in  and  take 
charge  of  branches  of  industry.  .  .  .  These  are 
Prussian  methods.  We.  as  Liberals,  desire  to  pre- 
serve mdependence  and  individuality."* 

The  latter-day  alliance  between  Prussianism  and 
Socialism  is  one  of  the  most  remarkable  phenomena 
of  these  extraordinary  times.  Let  us  be  quite  clear 
that  we  want  Reconstruction  in  order  to  repair  the 
ravages  of  war,  and  to  equip  us  the  better  for  the 
march  of  progress,  but  not  for  the  purpose  of  per- 
petuating the  millions  of  war  jobs  which  we  have 
had  to  create  in  the  last  three  years. 

To  the  present  writer  this  point  is  of  great  import- 
ance, because  the  scheme  here  suggested  and  already 
outlined  in  "  Trade  as  a  Science  "  involves  the 
appointment  of  many  thousands  of  trade  officials 
and  unthinking  critics  have  been  inclined  to  over- 
look the  essential  difference  between  a  clerk  in 
Whitehall  and  an  expert  trade  commissioner  in 
Pekin,  and  to  dismiss  the  scheme  with  the  old  sneer 
-— "  Another  army  of  officials  !  " 

v1a^'\-^'''^'^'\^Z''?^'   *'    Bradford   and    District    Manufacturers' 
Federation,  April  i6th,  1917.  "uJHciurers 

2  Viscount  Bryce  at  the  National  Liberal  Club,  March  29th,  191 7. 


ADVICE  TO  RECONSTRUCTORS        23 

For  this  reason  I  desire  to  put  great  emphasis 
upon  the  absolute  necessity  of  wiping  out  at  the 
earliest  moment  all  war-time  civilian  appointments. 
The  holders  of  these  posts  have  no  claims  on  the 
nation.  The  soldier  will  be  demobilised  without  a 
second  consideration,  and  there  is  no  reason  why 
the  man  who  has  preferred  to  do  his  fighting  in 
Westminster  instead  of  Mesopotamia  should  have 
any  greater  claim  to  continuity  of  employment. 
He  has  enjoyed  the  market  rate  of  pay,  the  soldier 
has  not.  He  has  in  most  cases  derived  material 
advantage  from  the  war.  Where  there  has  been 
sacrifice  it  has  been  on  the  lowest  scale  and  he  should 
be  the  first  to  go. 

If  it  is  essential  that  in  a  few  cases  these  jobs  must 
be  perpetuated,  then  nine  times  out  of  ten  there  are 
better  men  in  the  Army  who  have  stronger  claims 
than  the  present  occupants.  It  is,  of  course,  obvious 
that  here  and  there  a  piece  of  war  work  may  have 
a  permanent  value  and  its  continuance  may  be 
highly  desirable,  but  such  considerations  must  come 
from  outside  and  not  from  inside.  There  must  be 
a  definite  demand  from  independent  sources,  and 
little  or  no  weight  must  be  attached  to  schemes 
which  come  from  interested  inside  parties. 

Another  fundamental  consideration  which  Would- 
be  Reconstructors  should  carefully  study  in  attempt- 
ing to  apply  war-time  experiences  to  peace  conditions 
is  connected  with  the  office  of  the  Censor.  Since 
1 914  the  Government  of  the  country,  both  civil  and 
military,    has   enjoyed   an   immunity   from   press 


24 


THE  TRADE  OF  TO-MORROW 


"J 


criticism  which  is  unprecedented.  Two  causes  have 
brought  this  about :  first,  the  Defence  of  the  Realm 
Act,  and  second,  and  even  more  powerful,  a  deep 
sense  of  patriotic  responsibility  on  the  part  of  the 
Press.  It  must  not,  however,  be  assumed  that 
because  some  authority  has  been  allowed  to  work  its 
sweet  will  without  serious  protest,  the  pubhc  or  the 
Press  is  unaware  of  its  grave  blunders,  of  the  in- 
justice it  has  perpetrated,  or  of  the  damage  it 
has  done  to  all  sorts  of  innocent  interests.  All  this 
is  recognised  as  the  price  of  war,  but  nothing  of 
the  kind  will  be  tolerated  for  five  minutes  for  any 
other  reason. 

The  Prussian  is  the  slave  of  the  State,  but  the  State 
is  the  servant  of  the  Briton.  This  fundamental 
distinction  must  never  be  forgotten.  In  the  midst 
of  war  we  are  told  that  Germany  has  adopted 
National  Service,  and  we  accept  that  argument  as 
a  good  reason  why  we  should  submit  to  that  stupid 
scheme  for  "  deyitahsing  and  misdirecting  the 
energies  of  the  nation."  But  in  peace  time  such  an 
argument  would  have  an  exactly  opposite  applica- 
tion. 

There  is  another  point  which  Reconstructors 
should  be  prepared  to  meet.  The  vested  interests 
in  some  temporary  war  department  may  be  relied 
upon  to  play  the  financial  card  very  skilfully.  We 
shall  be  told  that  we  have  spent  many  millions  in 
estabhshing  a  department,  providing  it  with  build- 
ings, plant,  equipment,  and  what  not,  and  that  surely 
this  money  must  not   be  thrown  away.     That  is 


ADVICE  TO  RECONSTRUCTORS 


25 


a  false  argument.  In  making  war  we  have  de- 
liberately thrown  away  thousands  of  millions,  and 
whether  it  has  gone  in  bricks  and  mortar  in  West- 
minster, machinery  in  Coventry,  or  powder  in 
Flanders,  it  is  all  waste,  and  the  only  people  who 
are  entitled  to  annuities  out  of  the  process  are  those 
who  have  suffered  on  the  actual  battle-field. 

We  must  avoid  buying  a  lot  of  silly  schemes  on 
the  principles  which  guide  the  woman  at  the  draper's 
sale.  The  aim  of  Reconstructors  should  be  to  blot 
out  the  effects  of  the  war  as  speedily  and  as  effec- 
tually as  possible,  and  not  to  perpetuate  one  of  its 
most  glaring  abuses. 

Reconstructors  must  also  be  very  careful  to  see 
that  their  suggestions  are  financially  sound.  It  is 
not  uncommon  to  hear  it  argued  that  because  we 
can  raise  a  thousand  millions  for  war,  therefore 
we  ought  to  be  able  to  raise  a  like  sum  for  a  better 
purpose.  But  we  have  not  raised  any  such  sum  in 
reality.  All  we  have  done  is  to  raise  threepence 
and  send  a  bill  for  ninepence  to  posterity.  I  am 
reminded  of  an  old  merchant  I  used  to  know  who 
carried  on  his  business  by  means  of  bills.  He  became 
so  accustomed  to  this  system  and  so  blind  to  its 
meaning  that  he  developed  the  habit  of  saying 
whenever  he  signed  a  six  months'  acceptance : 
"Well,  thank  God,  that's  paid."  That  man's 
successors  had  no  such  reason  for  thankfulness,  as 
they  found  upon  his  demise  that  instead  of  a  large 
estate,  which  they  hoped  to  enjoy,  there  was  a 
considerable  deficiency. 


26 


THE  TRADE  OF  TO-MORROW 


I 

One  of  the  worst — because  the  least  apparent— 
of  the  evils  which  war  has  brought  upon  us  is  a 
false  prosperity,  which  is  chiefly  due  to  excessive 
inflation  of  the  currency  and  the  lavish  creation  of 
credits. 

It  becomes,  therefore,  very  necessary  to  insist 
that  there  is  no  vested  interest  in  war  profits, 
whether  they  take  the  form  of  extravagant  wages, 
inflated  dividends,  high  prices,  or  soft  jobs. 

A  splendid  example  of  the  mixture  of  candour  and 
folly  in  this  matter  was  provided  by  Mr.  Neville 
Chamberlain  in  an  interview  with  an  American 
journalist  reported  in  the  Observer  on  April  29th, 
1917.  "  Another  great  service  which  the  war  has 
done  to  Britain  has  been  to  teach  us  all  to  view  with 
real  complacency  the  expenditure  of  Government 
money  upon  pubHc  works."  This  sentence  robbed 
of  its  context  is  not  quite  fair  to  Mr.  Chamberlain, 
but  it  serves  our  purpose  because  it  reflects  the  mind 
of  many  of  those  who  have  been  called  to  rule  over 
us  in  these  latter  troublous  days.  When  the  war 
is  over  we  shall  have  to  learn  to  view  with  real 
alarm  and  not  complacency  the  expenditure  of  any 
public  money  without  good  cause  shown.  If  the 
British  Empire  is  to  be  worthy  of  its  name  it  must 
be  financially  sound,  and  the  devil's  dance  in  finance 
set  going  to  the  order  of  the  Kaiser  must  be  stopped 
at  the  first  possible  moment.  This  is  not  to  say  that 
we  cannot  raise  unlimited  sums  for  necessary  and 
essential  purposes,  but  to  enable  us  to  do  so  the 
present  unthinkable  waste  in  all  departments  must 


ADVICE  TO  RECONSTRUCTORS         27 

be  absolutely  stopped  and  there  must  be  no  "  com- 
placency." 

Reconstructors  should  also  consider  another 
series  of  important  points,  when  they  touch  upon 
trading  matters.  We  must  avoid  in  every  case 
great  building  schemes  which  begin  at  the  top. 
The  most  general  criticism  which  can  be  justly 
levelled  against  our  war  methods  is  that  we  have 
acted  irrationally,  always  trying  to  build  from  the 
top,  by  means  of  huge  central  departments  with 
swarms  of  officials.  The  rational  thing  is  to  begin 
building  from  the  bottom.  Whatever  the  problem, 
first  find  the  unit  and  work  from  that. 

When  deaUng  with  industry  this  is  a  vital  point. 
Trade  must  be  studied  and  arranged  trade  by  trade, 
one  trade  at  a  time,  and  the  unit  must  be  a  single 
industry. 

The  Reconstructor  would  also  do  well  to  get  a 
clear  idea  of  the  proper  functions  of  an  official  and 
the  proper  place  for  a  business  man.  They  are 
different  types,  with  different  spheres  of  usefulness, 
and  the  mixing  up  of  the  two  is  fatal.  The  official 
has  always  been  known  to  be  a  failure  in  commercial 
and  industrial  matters,  and  since  1914  it  has  become 
apparent  that  the  business  man  is  not  to  be  trusted 
in  an  official  capacity. 

Lastly,  the  Reconstructor  should  work  in  the 
daylight.  Every  theory,  every  idea,  every  draft 
should  be  available  to  all  parties  likely  to  be  inter- 
ested. When  war  is  over  we  must  give  up  the  habit 
of  setting  a  scheme  in  motion  first,  and  discussing 
it  afterwards. 


CHAPTER  III. 

THE  CASE  FOR  DEVOLUTION. 

/  By  far  the  most  difficult  task  which  confronts  the 
^  industrial  reformer  is  to  define  exactly  the  functions 
I  and  duties  of  the  Government.  The  developments 
of  the  last  three  years  have  not  made  this  easier. 
We  have  on  the  one  hand  the  extreme  individualism 
of  the  past  and  on  the  other  the  alarming  socialism 
of  the  present ;  for  the  wildest  dreams  of  the  wildest 
socialist  have  materiaHsed  into  amazing  fact,  and 
we  are  living  to-day  under  a  system  of  State  control 
of  production  and  State  interference  in  trade  that 
would  have  been  inconceivable  in  1914. 

The  battle  of  the  immediate  future  will  be  between 
those  who  think  that  the  State  should  continue  in 
the  trading  career  which  it  has  recently  adopted, 
and  those  who  believe  that  we  should  revert  to 
unadulterated  private  enterprise.  In  the  end 
neither  party  will  win  :  because  both  systems  are 
thoroughly  bad  and  foredoomed  to  failure.  Unre- 
stricted individualism  is  admitted  on  all  hands  to 
be  incapable  of  meeting  the  world  crisis  with  which 
we  are  faced.    State  trading,  on  the  other  hand, 


THE  CASE  FOR  DEVOLUTION 


29 


is  also  an  impossible  proposition.  Those  who  have 
experience  of  it  will  agree  that  it  lacks  certain  vital 
elements  which  are  inseparable  from  success  in  the 
realm  of  commerce  and  industry. 

The  endeavour  of  the  writer  is  to  find  a  scheme 
which  will  unite  the  best  features  of  the  two  systems. 
The  State  must  help  in  industry  ;   it  must  assume^ 
a  measure  of  control :  but  without  individual  initi- 
ative and  individual  interest,  industry  can  not  and     I 
will  not  thrive,  nor  will  the  world  secure  the  benefits     \ 
which  it  is  entitled  to  demand  from  it.  *""^-v^ 

The  war  has  given  the  Socialist  a  chance  to  show 
what  the  State  can  do  in  trade  and  industry  and 
has  convinced  most  right-thinking  people  of  what 
they  already  suspected.  It  has  shown  that  the 
more  the  State  has  to  do  with  the  actual  work  of 
production  the  more  the  waste  and  extravagance 
involved. 

There  is  here  no  intention  to  complain  of  what  has 
been  done  since  August,  1914.  We  were  admittedly 
unprepared  for  military  war,  and  we  had  to  face 
a  situation  which  was  unparalleled  in  history. 
Miracles  were  necessary,  and,  needless  to  say, 
miracles  were  not  performed.  But  we  got  as  near 
to  miracles  as  we  could,  and  we  have  achieved  the 
impossible  as  far  as  that  could  be  done.  Under 
these  circumstances  it  would  be  ungracious  to  cavil 
at  the  innumerable  blunders  of  the  past  few  years. 
The  subjection  of  Germany  would  never  have  been 
accomplished  if  the"  State  had  not  taken  the  task  in 
hand — without    regard    to    anybody's    interests, 


30  THE  TRADE  OF  TO-MORROW 


without  regard  to  the  future,  or  to  anything  but  the 
immediate  prosecution  of  the  war.  The  fact  that 
the  most  violent  interference  with  everything  and 
everybody  has  been  necessary,  the  fact  that  destruc- 
tion and  waste,  apart  altogether  from  the  battle- 
field, have  been  carried  on  at  a  rate  that  is  appalling, 
must  therefore  simply  be  credited  or  debited  to 
"  a  state  of  war."  But  it  cannot  be  too  emphatic- 
ally stated  that  this  sort  of  thing  has  been  tolerated 
for  the  sole  purpose  of  defeating  Germany,  and 
when  that  purpose  is  achieved  all  these  abuses 
must  be  brought  to  an  end  with  the  least  possible 
delay. 

This  point  cannot  be  made  too  frequently  or 
pressed  home  with  too  great  force,  because  there 
are  to-day  numerous  groups  of  persons  with  ready- 
made  plans  for  continuing  many  of  the  abuses 
which  we  have  had  to  suffer  since  1914. 

Mr.  Neville  Chamberlain,  whose  candid  indiscre- 
tion we  have  already  acknowledged,  voiced  the 
views  of  numbers  of  our  war-time  governors,  in  the 
interview  which  he  gave  to  Mr.  Edward  Marshall, 
an  American  newspaper  correspondent.  "Many 
things,"  he  said,  "which  before  the  war  were 
regarded  as  the  fads  of  enthusiasts  will  be  regarded 
as  wise  programmes  after  the  war  ends."  In 
my  view  Mr.  Chamberlain  was  unduly  optimistic. 
He  allowed  the  splendour  of  the  St.  Ermin's  Hotel 
and  the  glorious  temporary  power  of  the  Director- 
ship of  National  Service  to  carry  him  away.  If  he 
had  only  been  able  to  divest  himself  of  his  official 


THE  CASE  FOR  DEVOLUTION 


31 


surroundings  and  peep  into  the  thoughts  of  some  of 
the  best  British  brains,  he  would  have  discovered 
that  there  was  the  deepest  resentment  at  the  way 
in  which  the  Defence  of  the  Realm  Act  has  been 
used  to  foist  upon  the  community  all  sorts  of  stupid 
"  fads  of  enthusiasts  "  ;  that  the  force  of  patriotism 
was  sufficient  to  keep  this  resentment  from  finding 
expression  in  the  middle  of  the  war,  but  that  when 
the  day  of  peace  comes  these  enthusiasts,  including 
Mr.  Neville  Chamberlain  himself,  robbed  of  the 
advantages  of  military  necessity,  will  have  to 
justify  all  the  silly  schemes  and  programmes  upon 
which  they  have  squandered  the  public  money. 

The  war  has  done  many  remarkable  things,  but 
nothing  has  been  more  astounding  than  the  complete 
abandonment  of  all  the  principles  of  Liberalism, 
an  abandonment  the  strength  of  which  has  been  in 
direct  ratio  to  the  pre-war  strength  of  the  Liberalism 
of  our  Dictators.  Abraham  Lincoln,  echoed  since 
by  many  great  English  Liberals,  defined  Liberalism 
as  "  Government  of  the  people,  by  the  people,  for 
the  people."  Mr.  Lloyd  George  has  created  a 
system  of  Government  in  which  the  very  last  folk 
to  be  consulted,  or  to  be  considered,  or  to  have 
any  voice  in  the  matter  are  the  people  who  are 
governed. 

But  in  abandoning  Liberalism  we  have  not 
adopted  the  old-time  alternative  of  Conservatism. 
In  the  fight  for  liberty  we  have  not  only  robbed  the 
people  of  their  liberty  but  of  their  property.  We 
have  invented  a  most  remarkable  mixture  of  the 


32 


THE  TRADE  OF  TO-MORROW 


principles  of  the  Kaiser  and  of  Mr.  H.  G.  Wells, 
which  will  provide  the  historians  and  economists 
of  the  future  with  ample  material  for  debate. 

To  return  to  trading  matters,  it  would  seem  to  be 
wise  to  re-study  the  problems  of  Government  or 
State  trading  from  the  beginning,  and  it  must  cer- 
tainly be  understood  that  war-time  experiences  do 
not  apply  to  peace-time  conditions.  In  time  of 
war  it  is  necessary  to  allow  the  Government  official 
to  dabble  in  trade.  Nobody  but  a  Government 
official  can  order  supplies  for  the  forces.  But  that 
does  not  mean  that  the  Government  official  buys 
these  goods  to  the  best  advantage,  arranges  for  their 
manufacture  to  the  best  advantage,  or  produces  them 
in  the  most  economical  way. 

In  the  ordinary  course  the  Government  official 
is  the  very  last  person  who  should  be  entrusted  with 
the  direction  of  the  practical  side  of  industry.  He 
is  constitutionally  unfitted  for  the  job,  and  the 
terms  on  which  he  holds  his  appointment  render  him 
further  disqualified  as  a  buyer  or  seller  or  producer. 
There  is  in  his  case  an  absolute  absence  of  respon- 
sibility, and  no  commercial  transaction  can  be  car- 
ried through  satisfactorily  in  these  circumstances. 
In  Government  enterprises  nobody  pays,  nobody 
suffers,  nobody  runs  any  risk.  The  position  of  the 
Director  of  a  Government  establishment  is  entirely 
different  from  the  position  of  the  Director  of  a 
properly  constituted  industrial  concern.  The  latter 
nms  the  risk  of  failure  and  takes  his  chance  of 
success,  and  he  and  all  those  dependent  upon  him 


THE  CASE  FOR  DEVOLUTION 


33 


rise  or  fall  by  the  skill  which  he  displays  in  the  con- 
duct of  affairs.  But  with  the  Government  official, 
the  position  is  entirely  different.  He  has  only  two 
prospects  before  him  :  a  peerage  if  he  succeeds,  a 
pension  if  he  fails.  "  Success  "  is  hardly  the  word 
to  use  in  connection  with  a  Government  Depart- 
ment which  manages  to  perform  its  functions  in 
accordance  with  its  terms  of  reference,  because  it 
starts  out  with  advantages  arising  from  the  authority 
which  it  enjoys,  advantages  which  are  denied  to 
any  ordinary  commercial  enterprise. 

But  the  objections  to  Government  trading  can 
be  put  upon  a  broader  basis  if  it  is  admitted  that 
the  need  of  the  nation  is  to  secure  the  absolute 
maximum  in  output  of  aU  descriptions.  To 
secure  that  maximimi  it  is  necessary  that  every 
individual  member  of  the  nation  should  be  continually 
employed  to  the  best  advantage.  If  it  were  possible 
for  the  Government  to  arrange  to  take  into  its 
employ  every  inhabitant  of  these  islands  and  organise 
them  thoroughly,  to  equip  itself  with  the  best 
type  of  machines  for  every  purpose,  and  to  put 
everybody  to  the  job  for  which  he  is  most  fitted, 
and  if  that  process  would  not  tend  to  decrease  individual 
effort,  then  something  might  be  said  for  Government 
trading.  But  if  the  Government  confines  itself, 
as  of  course  it  must,  to  undertaking  a  part  only  of 
the  productive  work  of  the  country,  and  thus  puts 
itself  into  competition  with  the  rest  of  the  nation, 
it  will  be  found  that  such  action  simply  discourages 
those  who  are  not  in  Government  employ,  if  indeed 


34 


THE  TRADE  OF  TO-MORROW 


^Ij 


it  does  not  make  it  impossible  for  them  to  carry 
on  business  at  all. 

To  secure  maximum  output,  therefore,  it  is  neces- 
sary for  the  Government  to  refrain  from  any  form 
of  competition  with  any  of  its  subjects,  and  to  devote 
itself  to  helping  and  encouraging  and  fostering  the 
activities  of  all  of  them  for  the  benefit  of  all. 

If  any  reader  should  desire  to  be  strengthened  in 
his  views  as  to  the  blunders  of  State,  Municipal,  and 
other  forms  of  public  trading  enterprise,  he  could 
not  do  better  than  study  the  writings  of  the  advo- 
cates of  these  schemes.  There  are,  of  course,  very 
strong  reasons  why  pubUc  authorities  should  take 
in  hand  several  well-defined  forms  of  public  service. 
Wherever  there  is  anything  in  the  nature  of  what  are 
known  as  public  utility  services,  the  case  for  public 
ownership  is  exceptionally  strong,  but  when  State 
trading  goes  beyond  its  province  in  the  way  that  it 
has  been  obliged  to  do  during  the  war,  abuses  of 
a  very  serious  character  invariably  arise. 

In  May,  1915,  the  New  Statesman  published  a 
Special  Supplement  on  "  State  and  Municipal 
Enterprise,"  and  gave  an  exhaustive  review  of  the 
present  position.  The  writers  are  frankly  in  favour 
of  a  very  wide  extension  of  this  form  of  public 
activity,  and  hail  with  delight  the  great  steps  for- 
ward that  have  been  made  since  1914. 

It  is  especially  interesting,  therefore,  to  notice  the 
examples  of  State  trading  which  they  single  out  for 
special  praise  and  as  models  of  the  sort  of  thing 
which  should  be  extended  in  all  directions. 


THE  CASE  FOR  DEVOLUTION         35 

"  We  need  only  mention,  to  begin  with,  the 
colossal  Government  factories  constantly  at  work 
in  many  different  countries  in  the  various  State 
monopolies,  making  tobacco,  cigars,  matches, 
gunpowder,  alcoholic  drinks,  salt,  potash,  mineral 
waters,  carpets,  porcelain,  the  finest  engravings, 
and  what  not,  simply  for  sale." 

To  the  doctrinaire  this  sort  of  example  may  inspire 
confidence  and  enthusiasm,  but  to  any  who  have  the 
most  elementary  knowledge  of  trading  conditions 
and  requirements,  there  is  not  a  single  case 
covered  by  the  above  paragraph  which  would 
warrant  any  support  to  the  idea  of  further 
development  on  the  part  of  public  bodies  in  these 
directions. 

Many  of  these  illustrations  are  examples  of  the 
grossest  and  worst  forms  of  monopoly  which  it  is 
possible  to  imagine.  Monopoly  in  private  hands  is 
bad  enough,  but  when  the  State  makes  use  of  its 
powers  to  foist  upon  its  subjects  tobacco,  cigars,  and 
matches  such  as  the  poor  Frenchman  is  doomed  to 
use,  reasonable  people  sigh  for  liberty. 

If  the  New  Statesman  is  to  be  taken  seriously, 
it  should  be  informed  that  a  revolution  will  take 
place  in  these  islands  before  the  average  Briton  will 
tolerate  the  sort  of  thing  that  the  continental 
nations  have  to  put  up  with  in  this  way. 

It  is  even  more  surprising  to  find  the  New  States- 
man holding  up  salt  as  an  example  of  benevolent 
and  wise  Government  action.  Further  inquiry  would 
surely  show  that  the  tax  on  salt  which  is  the  result 


36 


THE  TRADE  OF  TO-MORROW 


of  such  action  constitutes  one  of  the  gravest  dangers 
to  the  health  and  welfare  of  the  States  who  are  so 
misguided  as  to  adopt  it. 

The  carpets  and  porcelain  referred  to  are  the 
"  Gobelins,"  "  Sevres,"  and  "  Dresden  "  factories, 
but  these  are  not  examples  of  commercial  enter- 
prises. They  are  really  part  of  the  system  of 
national  education,  and  I  should  be  very  glad  indeed 
to  see  the  educational  authorities  in  this  country 
spending  more  of  their  energies  in  connection  with 
the  production  of  works  of  art. 

The  same  publication  gives  another  excellent 
quotation,  which  instead  of  strengthening  the  case 
for  State  trading  is  the  most  emphatic  condemnation 
of  it  that  could  be  imagined.  The  New  States- 
man  quotes  with  pride,  as  showing  the  benevolent 
change  that  has  come  about  within  a  single  genera- 
tion, Mr.  Lewis  Harcourt,  then  Secretary  of  State 
for  the  Colonies.  Mr.  (now  Viscount)  Harcourt 
is  reported  to  have  said  : — 

"  In  these  days  the  Colonial  Office  has  more  the 
attributes  of  an  immense  trading  and  administrative 
concern  than  those  of  earlier  days,  when  it  was  a 
mere  machine  of  Government.  My  days  and  nights 
are  spent  in  the  study  of  medicine,  in  the  details  of 
railway  construction,  with  a  desire  that  the  smallest 
sum  of  money  may  lay  the  largest  number  of  miles 
of  track  in  the  fewest  possible  days.  I  am  a  coal 
and  tin  miner  in  Nigeria,  a  gold  miner  in  Guiana. 
I  seek  timber  in  one  colony,  oil  and  nuts  in  another, 
cocoa  in  a  third — copra  and  copal,  seisal  and  hemp. 


THE  CASE  FOR  DEVOLUTION         ^y 

cotton,  coffee,  tobacco  are  common  objects  of  my 
daily  care." 

This  is  surely  a  most  remarkable  case  of  the  misuse 
of  an  illustration.  It  may  serve  the  purpose  of  the 
Fabian  nursery  and  strengthen  the  student's  attach- 
ment to  the  principles  he  holds  dear,  but  to  anyone 
with  commercial  experience  it  has  the  exactly  oppo- 
site application. 

The  whole  tendency  of  business  for  a  hundred 
years    past    has    been    specialisation.    The    only 
successful  industrial  developments  have  been  along 
the    lines    of    specialisation.     The    difficulties    of 
succeeding  in  any  department  of  manufacture  or 
production  are  now  so  great  that  it  is  essential  that 
every  business  man  should  confine  his  studies  and 
effort  within  a  Hmited  compass.    And,  yet,  if  you 
please,   we  are  asked  to  believe  that  Mr.'  Lewis 
Harcourt,  cultured  and  charming  as  he  is,  but  whose 
apprenticeship  to  trade  is  not  upon  the  records,  can 
be  a  successful  coal  miner,  tin  miner,  gold  miner, 
lumber  man,  oil  and  nut  merchant,  cocoa  importer,' 
and  half  a  dozen  other  things  every  day  of  his  life! 
The  answer  to  Mr.  Harcourt  is  perfectly  simple 
and  obvious.     It  is  that  the  office  over  which  he 
presides  is  under  no  obligation  to  make  a  profit 
has  no  account  to  render  to  proprietors  or  share- 
holders, is  not  dependent  for  its  existence  upon  the 
revenues  which  it  can  earn,  but  has  at  the  back  of 
It  the  inexhaustible  funds  of  the  poor  British  tax- 
payer, and  in  consequence  can  afford  to  allow  a  most 
estimable  aristocrat  to  trifle  with  all  these  important 


ii 


38 


THE  TRADE  OF  TO-MORROW 


matters,  to  the  sorrow,  indeed  chagrin,  of  the  people 
who  know. 

It  has  for  long  been  recognised  that  the  orthodox 
official  mind  is  not  the  type  that  is  required  for 
success  in  business.  After  our  painful  war  experi- 
ences it  will  equally  come  to  be  recognised  that  the 
successful  business  mind  is  the  very  last  that  one 
expects  to  succeed  in  any  official  capacity.  Having 
arrived  in  this  way  at  both  sides  of  the  question,  it 
will  be  seen  that  there  is  a  very  definite  dividing  line 
between  the  functions  of  the  official  and  the  func- 
tions of  the  business  man,  and  that  beyond  that 
line  neither  can  travel  with  success. 

It  wbuld  not  be  fair  to  base  arguments  upon  the 
experiences  of  1914-1917,  if  it  were  admitted  that 
the  numerous  developments  of  those  days  were 
merely  war- time  makeshifts.  But  in  view  of  the 
attempt  to  bolster  up  and  fortify  these  houses 
built  uf)on  the  sand,  we  are  entitled  to  protest. 


CHAPTER  IV. 

THE  OFFICIAL  AND  THE  BUSINESS  MAN. 

A  SURVEY  of  most  of  the  attempts  of  Government 
Departments  to  handle  business  propositions  creates 
in  the  mind  of  the  business  man  a  feehng  of  pity. 
All  these  things  seem  so  simple  on  the  face  of  them, 
and  the  learned  Government  officials,  with  their 
carefully  prepared  theoretical  minutes,  are  generally 
able  to  make  out  a  good  case  for  any  action  which 
they  propose  to  take.  But  commerce  is  a  compli- 
cated thing,  and  those  who  have  experience  of  it 
have  reason  to  know  that  simple  theories  do  not 
always  work  out  in  practice. 

The  official  mind  is  not  a  business  mind.  It 
delights  in  points  which  for  commercial  purposes 
do  not  exist  and  which  merely  bore  the  business 
man.  The  impossibility  of  mixing  these  two  types 
has  been  illustrated  a  thousand  times  since  it  became 
the  fashion  for  business  men  to  give  their  services 
to  Government  Departments. 

The  business  man  cannot  accustom  himself  to 
official  etiquette.  He  cannot  see  the  necessity  for 
the  innumerable  references  to  other  departments 
and  the  consequent  intolerable  delays. 

39 


40 


THE  TRADE  OF  TO-MORROW 


It  may  not  be  generally  known  that  if  a  post  card 
is  sent  to  a  Secretary  of  State  to  call  his  attention 
to  some  trivial  point,  that  post  card  is  threaded  with 
an  official  tape,  attached  to  a  Minute  Sheet,  and  the 
whole  bound  up  in  a  manilla  jacket.  On  the  front 
of  the  jacket  will  be  written  a  whole  mass  of  numbers 
and  references,  inserted  there  by  a  registry  which 
no  doubt  understands  them.  Below  this  informa- 
tion are  three  or  four  columns  in  which  are  entered 
the  date  the  document  is  received,  the  name  of  the 
person  to  whom  it  is  referred,  and  the  date  upon 
which  he  passes  it  on.  There  is  accommodation  on 
the  front  of  this  jacket  for  eighty  or  ninety  such 
entries.  The  ambition  of  the  official  mind  is  only 
achieved  when  the  whole  of  the  front  of  the  jacket 
is  completely  occupied  with  the  names  of  the  officials 
to  whom  the  matter  has  been  referred. 

This  post  card  will  wander  about  Whitehall  for 
months  and  be  sent  to  everybody  who  is  anybody, 
"  for  observations."  No  well-constituted  Govern- 
ment official  takes  action  until  this  process  of  con- 
sultation has  been  made  as  complete  as  possible. 
The  really  expert  official  is  the  one  who  can  think  of 
the  largest  number  of  other  officials  who  ought  to 
be  consulted  about  every  point.  The  super-official 
is  the  one  with  a  mind  so  highly  trained  that  it 
can  discover  some  good  reason  why  every  matter 
submitted  to  it  is  not  really  a  matter  for  it  to 
decide  at  all,  but  for  the  consideration  of  some  other 
department. 

This  is  the  way  in  which  the  British  tax-payer  is 


THE  OFFICIAL  AND  THE  BUSINESS  MAN    41 

doomed  to  do  his  business.  The  joke  of  the  whole 
thing  is  that  these  numerous  references  from  great 
minds  which  have  secured  official  distinction  on  the 
strength  of  their  classical  education,  produce  in 
the  end  nothing  but  error.  These  are  the  methods 
which  fix  the  price  of  the  potato  at  £S  a  ton  and 
forget  to  mention  whether  that  is  a  minimum  or 
a  maximum  figure.  They  evolve  an  Order  that 
gooseberries  shall  be  ;f20  a  ton  when  the  market 
only  asks  £14.  They  load  a  ship,  unload  it,  and 
load  it  again  with  the  same  cargo  before  it  is 
allowed  to  sail. 

There  is  another  way  in  which  the  official  fre- 
quently goes  wrong  when  he  enters  the  trading 
field.  He  has  been  educated  in  the  theory  of 
Government  and  taught  to  believe  that  the  under- 
lying principles  of  every  department  are  the  same. 
That  is  why  when  he  gets  a  problem  to  solve  he 
passes  it  round  from  department  to  department. 
In  exactly  the  same  way  he  makes  his  career  and 
gets  his  promotion  by  being  passed  on  from  one 
department  to  another.  This  sort  of  thing  will  not 
do  in  business.  Experience  in  the  Post  Office  may 
qualify  a  man  for  a  high  position  in  the  Inland 
Revenue  Department,  or  success  in  the  India  Office 
may  be  the  road  to  a  better  salary  at  the  Treasury. 
But  when  we  come  to  trade,  experience  gained  in 
one  trade  is  very  seldom  of  any  use  in  another. 
Each  trade  has  its  peculiarities  ;  each  trade  has  its 
habits  and  its  methods  of  doing  business :  and  ex- 
perience gained  in  the  manufacture  of  gas  will  be 


1 


42  THE  TRADE  OF  TO-MORROW 

of  no  use  and  may  even  be  a  disadvantage  in  deal- 
ing with  the  problems  of  the  timber  trade. 

The  endeavour  of  the  writer  is  to  show  that  a  very 
careful  distinction  should  be  made  between  the  func- 
tions which  are  proper  to  the  Government  and  those 
which  should  be  left  to  the  individual  •    and  it 
becomes  obvious  that  in  trading  matters,  or  any- 
thing nearly  appertaining  to  trade,  the  Government 
and  its  officials  are  out  of  place.     The  old  Board 
of  Trade  furnishes  an  excellent  example  of  the  proper 
functions  of  the  Government.    So  long  as  it  confined 
Its  attention  to  the  regulation  of  such  matters  as 
bankruptcy,    harbours,    railways,    load   lines,    life- 
saving  appliances,  factory  inspection,  weights  and 
measures,  company  registration,  and  other  similar 
devices  for  carrying  on  work  which  may  be  described 
as  the  "  policing  "  of  trade,  it  was  within  its  proper 
limits.     But  its  later  developments  into  Commercial 
--Intelligence  Branches  and  Labour  Exchange  Depart- 
ments, have  gone  over  the  line  which  should  define 
the  activities  of  the  official. 

The  Commercial  Intelligence  Branch  of  the  Board 
of  Trade  may  be  examined  in  this  connection.  Here 
is  another  case  where  theory  does  not  work  out  in 
practice.  It  would  seem  to  be  a  very  proper  proceed- 
ing for  the  Government  to  endeavour  to  collect 
commercial  intelligence  for  the  benefit  of  traders. 
But  the  fact  that  notwithstanding  the  most  strenuous 
efforts  the  work  of  this  department  has  never  grown 
to  the  size  of  a  respectable  merchant's  office,  shows 
that  there  is  something  wrong.    As  is  pointed  out 


THE  OFFICIAL  AND  THE  BUSINESS  MAN    43 

elsewhere,   the   mistake   in  this   matter   was   the 
endeavour  to  comprise  within  a  single  department 
the  interests  of  all  the  trade  of  the  country.     As  a 
matter   of   fact,   every  industry  requires   its   own 
commercial  intelligence  branch,  and  each  industry 
could  justify  an  office   of    its   own  of  far  larger 
dimensions   and  greater  activities  than  the  whole 
of  the  existing  Commercial  Intelligence  Department. 
We  must  recognise  that  the  official  is  no  business 
man  and  the  business  man  is  no  official.    The  busi- 
ness man's  life  is  made  up  of  successes  and  failures. 
He  runs,  as  everybody  knows,  what  is  called  a 
profit  and  loss  account.    Every  business  has  its 
losses  as  well  as  its  profits,  and  the  successful  busi- 
ness is  that  which  has  more  profits  than  losses  and 
thus  finishes  with  a  balance  on  the  right  side.    The 
business  man  is  free  to  make  mistakes  and  always 
does  make  them,  but  so  long  as  he  is  right  rather 
more  often  than  he  is  wrong,  he  justifies  his  existence. 
These  are  the   basic  principles   of  trading.     But 
they  cannot  apply  to  Government  activities.    The 
Government  in  theory  cannot  make  mistakes.      It 
must  always  be  right.    Hence  the  need  for  the 
classical  scholar  with  his  minutes  and  his  jackets 
and  his  innumerable  references,  things  which  ought 
to  be  unknown  in  business.    The  very  essence  of  a 
business  contract  is  time.    Every  trading  transac- 
tion must  have  a  time  limit  if  it  is  to  be  successful. 
The  most  profitable  piece  of  work  can  be  turned  into 
a  loss  if  only  sufficient  time  is  occupied  in  the  doing 
of  it.    The  principles  which  underlie  Government 


44  THE  TRADE  OF  TO-MORROW 

transactions  cannot  admit  this  time  factor.  The 
Government  cannot  hurry,  and  this  fact  alone 
ought  to  be  sufficient  to  keep  the  Government  out 
of  any  trading  transactions. 

But  this  chapter  wants  a  postscript,  or  it  might 
give  an  entirely  wrong  impression.  It  is  intended 
to  show  the  danger  of  trespass  by  the  official  beyond 
his  proper  sphere,  but  it  is  not  intended  to  imply  that 
the  official  is  unnecessary  or  incompetent  in  connec- 
tion with  those  functions  for  which  he  properlv 
exists.  ^    r     J 

When  trading  questions  are  delegated,  as  they 
wiU  have  to  be  delegated,  to  expert  Trade  Councils 
the  official  will  then  come  into  his  own.     The  pro- 
cedure of  those  Councils  will  require  regularising 
and  co-ordinating,  their  powers  will  want  definition 
their  actions  wiU  be  improved   by  criticism    their 
accounts  will  need  certifying,  their  differences  will 
call  for  arbitration,  their  confficting  interests  will 
have  to  be  reconciled  :  and  in  these  and  many  other 
ways  the  Government  officials  will  be  busily  occu- 
pied with  matters  which  they  understand  fully  and 
with  which  they  are  pre-eminently  fitted  to  deal. 


CHAPTER  V. 


"AUDACITY"  IN  TRADE. 


In  a  reply  to  a  deputation  of  the  Labour  Party, 
Mr.  Lloyd  George  said  : — 

*'  Audacity  is  the  thing  for  you.  Think  out  new 
ways.  Think  out  new  methods.  IJiink  out  even 
new  ways  of  dealing  with  old  problems.  Don't 
always  be  thinking  of  getting  back  to  where  you 
were  before  the  war.  Get  a  really  new  world."  .  .  . 
"  The  readier  we  are  to  cut  away  from  the  past  the 
better  are  we  likely  to  succeed."  .  .  .  "  I  believe  the 
settlement  after  the  war  will  succeed  in  proportion 
to  its  audacity." 

A  mandate  from  the  Prime  Minister  is  thus  the 
excuse  for  a  few  audacious  speculations  as  to  the 
possibilities  of  trade.  There  is  a  "  new  world  " 
to  be  got  in  trade,  if  only  we  go  the  right  way  to 
find  it. 

In  the  year  1900  the  United  Kingdom  exports 
amounted  to  £354,373,754,  or  £7  is.  6d.  per  head  of 
the  population.  In  1913  these  figures  had  risen 
to  £634,820,326,  or  £13  15s.  lod.  per  head.  Thus  in 
thirteen  years,  during  which  time  we  had  developed 

45 


46 


THE  TRADE  OF  TO-MORROW 


"AUDACITY''  IN  TRADE 


47 


m 


the  practice  of  restricting  output  to  a  fine  art,  we 
succeeded  in  very  nearly  doubling  our  rate  of  expor- 
tation. Further,  this  was  achieved  before  we  had 
tackled  the  problems  of  production  in  the  serious 
way  that  has  been  necessary  since  war  began,  before 
we  had  added  to  the  ranks  of  industry  the  million 
or  so  of  additional  workers  who  have  since  been 
discovered,  and  before  we  had  acquired  anything 
like  an  adequate  equipment  of  automatic  machinery. 

In  response  to  the  Prime  Minister's  request  for 
audacity  it  is  interesting  to  figure  what  would  happen 
if  exports  were  increased  to  £ioo  per  head  of  the 
population.  This  may  seem  to  be  aiming  too  high, 
but  it  is  not  an  altogether  impossible  suggestion, 
as  many  practical  readers,  readers  who  have 
acquaintance  with  the  httle  that  is  done  to  develop 
export  trade  in  most  directions,  will  agree. 

If  exports  were  increased  to  £ioo  per  head  of  the 
population  the  total  would  then  be  £4,616,875,098 
per  annum.  Now  let  it  be  imagined  for  a  moment 
that  the  war  could  be  paid  for  entirely  by  exports, 
an  assumption  that  is  not  absolutely  true  but  quite 
true  enough  for  our  present  purpose.  In  that  case, 
with  exports  at  £100  per  head,  we  could  pay  our 
war  costs  twice  as  rapidly  as  we  had  incurred  them. 
We  should  soon  get  "  a  really  new  world  "  that  way. 
But  "  audacity  "  leads  us  on  ! 

Why  should  it  not  be  possible  to  make  production 
the  fashion  ?  Since  1914  we  have  adopted  all  sorts 
of  fashions  that  we  never  dreamed  of  before.  It  is 
not   only  unpatriotic  but   bad  form  to  dress  well, 


and  in  this  and  many  other  ways  we  have  entirely 
reversed  our  views.  Is  it  then  unreasonable  to 
suggest  that  when  the  war  is  over  we  should  reverse 
our  views  on  trade  ?  Is  it  unreasonable  to  ask  that 
the  gentlemen  of  the  future  should  be  those  who  are 
actually  engaged  in  production  ?  Is  it  impossible 
that  we  should  reverse  the  social  status  of  the  pro- 
ducer and  the  man  of  leisure  ?  The  moral  force  of 
such  an  alteration  would  give  us  all  the  desired 
results.  The  readiness  with  which  we  have  adopted 
new  views  on  most  matters,  in  obedience  to  the 
dictates  of  war,  should  enable  us  to  take  up 
new  ideas  in  considering  the  vital  interests  of 
peace. 

There  was  a  time,  indeed  there  is  a  time,  when  the 
schoolmistress,  anxious  for  the  social  reputation  of 
her  seminary,  made  careful  inquiries  as  to  whether 
a  parent  was  in  trade  before  accepting  the  child. 
Why  should  the  rule  not  be  reversed  ?  If  the 
Archbishop  of  Canterbury,  and  one  or  two  such 
leaders,  would  invite  the  schoolmistress  in  the  future 
to  refuse  the  children  of  any  parents  who  were  not 
connected  with  some  form  of  production,  we  should 
add  a  very  large  slice  to  the  £100  per  head  of  exports 
that  we  have  set  as  our  ambition. 

As  things  were  constituted  in  1914,  no  trader  ever 
secured  admission  to  a  first-class  club,  as  a  trader. 
He  had  to  squeeze  in  as  a  director  of  companies, 
and  he  was  the  more  welcome  the  nearer  his  direc- 
torship approximated  to  the  guinea-pig  order.  Is 
it  too  mudh  of  a  revolutionary  suggestion  that  in 


48  THE  TRADE  OF  TO-MORROW 

view  of  the  nation's  crying  need  for  production, 
admission  to  clubs  in  the  future  should  be  on  the 
distinct  understanding  that  the  candidate  is  engaged 
in  some  useful  branch  of  industrial  activity  ? 

The  Vice-chancellor  of  the  University  of  Sheffield, 
Professor  Ripper,  has  expressed  this  point  in  an 
ideal  way.  "  Trade  and  industry,"  he  says,  "  must 
be  recognised  as  the  natural,  healthful,  and  normal 
means  whereby  the  nation  is  able  to  express  itself 
in  useful  service.  To  accomplish  this  result  will 
require  from  each  of  us,  from  the  highest  to  the 
lowest,  our  best  efforts,  and  our  most  devoted 
service." 

The  work  of  repairing  the  wastage  of  war  will 
require,  in  addition  to  a  great  deal  of  automatic 
machinery,  a  very  much  greater  deal  of  alteration 
in  the  fashion  with  regard  to  trading  matters. 

But  we  have  not  exhausted  the  possibilities  when 
we  have  induced  every  fit  hand  and  brain  to  take  a 
part  in  the  building  up  of  the  nation's  industry. 
The  next  step  would  be  an  Efficiency  Campaign. 
Imagine  the  possibilities  of  such  an  agitation  if 
conducted  with  half  the  vigour  of  the  Derby  scheme. 
Think  of  Mr.  Lloyd  George  with  aU  his  eloquence 
leading  a  campaign  for  "Empire  Efficiency." 
*'  There  has  never  yet  in  this  country,"  says  Mr. 
Charles  Lancaster,  "  been  any  public  agitation  for 
greater  national  efficiency.  Men  who  have  been 
called  captains  of  industry  have  now  and  then 
appeared,  and  will  appear  again,  but  no  great  man 
can  by  his  personal  management  compete  in  results 


it 


AUDACITY"  IN  TRADE 


49 


with  a  number  of  ordinary  men  who  have  been 
properly  organised  so  as  efficiently  to  co-operate." 
The  same  writer  makes  the  interesting  suggestion 
that  trade  associations  should  be  called  efficiency 
societies.  There  is  already  the  Bradford  Business 
Science  Club,  st  capital  little  body  of  keen  men  who 
meet  weekly  to  discuss  questions  of  efficiency.  I 
need  not  elaborate  this  point. 

We  are  getting  on  with  our  ;f  loo  per  head  of  the 
population.  Increased  machinery,  the  abolition  of 
limitation,  production  as  a  fashion,  coupled  with  an 
Efficiency  Campaign,  all  help  us  to  see  that  the 
figures  we  were  bold  enough  to  suggest  are  not  so 
impossible  after  all.  But  there  are  other  things 
that  yet  remain  to  be  done.  The  elimination  of 
waste  is  a  subject  all  to  itself,  full  of  really  gigantic 
possibilities.  The  authors  of  "  Eclipse  and 
Empire  "  state  it  as  their  opinion  that  by  means  of 
the  saving  of  waste  and  the  invention  of  new  methods 
and  materials,  the  whole  of  the  expenses  of  this 
great  war  could  be  defrayed  in  one  generation. 

So  far  we  have  proceeded  to  build  up  the  industrial 
revival  that  is  required  from  outside,  by  creating  a 
different  atmosphere,  a  different  standard  of  opinion, 
on  the  subject  of  trade  and  industry.  But  there  is 
other  work  to  do  before  we  shall  reach  our  ambition 
of  paying  for  the  war  in  a  couple  of  years. 

Such  business  brains  as  we  possess  are  to-day 
chiefly  devoted  to  the  welfare  of  individual  firms 
or  companies.  The  managers  of  a  shipbuilding 
company,  or  a  chemical  concern,  or  an  agricultural 

D 


Q|.; 


50  THE  TRADE  OF  TO-MORROW 

implement  house,  are  engaged  primarily  on  the  well- 
being  of  that  house.  A  very  large  proportion  of 
their  energies  is  devoted  to  competition  with  other 
houses,  and  as  a  result  there  is  overlapping  and  can- 
cellation of  effort  to  an  alarming  extent. 

A  very  great  step  forward  towards  our  £100  per 
head  and  our  "  new  world  "  would  be  made  on  the 
day  when  we  agreed  to  take  our  trades  one  at  a 
time,  trade   by  trade,    and  study  them   as   whole 
trades.    There  are  very  few  of  our  minor  industries 
whose  output  could  not  be  doubled  if  the^men 
engaged  in  them  were  to  work  together  instead  of 
against  one  another.     Production  of  large  varieties 
of  small  quantities  such  as  is  the  rule  in  England 
to-day,  would  give  way  to  production  of  limited 
varieties  in  big  quantities.     This  side  of  the  subject 
is  dealt  with  more  fully  elsewhere  and  need,  therefore, 
only  be  mentioned  here.     It  is,  however,  beyond 
dispute  that  there  is  room  for  immense  expansion 
in  the  output  of  each  of  our  industries  if  it  were 
possible  to  treat  each  of  them  as  one  single  unit 
and  organise  it  properly. 

This  brings  us  to  the  difficult  problem  of  the 
Nation's  interest  in  trade.  In  order  to  pay  for  the 
war  in  the  Hmited  time  that  Mr.  Lloyd  George's 
"  audacity  "  has  tempted  us  to  suggest,  it  will  be 
necessary  for  the  Government  to  take  a  very 
different  view  of  its  responsibilities  to  industry. 
Hitherto  the  theory  has  been  that  when  the  Govern- 
ment has  issued  a  few  regulations  as  to  guards  for 
machinery  and  fire  precautions  or  set  up  a  wages 


(< 


AUDACITY  "  IN  TRADE 


51 


board,  its  duty  to  trade  is  at  an  end.  In  future  the 
Government  will  have  to  take  a  much  fhore  active 
interest  in  the  promotion  of  trade.  We  cannot  again 
allow  whole  industries  to  disappear  simply  be- 
cause capitalists  find  a  more  remunerative  means  of 
employing  their  money,  or  workmen  go  on  strike. 
It  must  be  part  of  the  duty  of  the  Government  to 
see  that  each  industry  which  can  profitably  and 
properly  be  carried  on  in  these  islands  is  established 
on  a  firm  and  lasting  basis  and  exploited  to  its  fullest 
extent. 

This  question  of  the  relations  between  the  Govern- 
ment and  trade  is  the  matter  with  which  this  book 
is  chiefly  concerned,  and  is  the  most  difficult  of  all 
the  problems  connected  with  Reconstruction.  If 
the  possibilities  of  trade  are  to  be  realised  to  their 
fullest  extent  it  is  obvious  that  Government  help 
and  encouragement  must  be  forthcoming.  Govern- 
ment Departments  must  realise  that  to  set  up  in 
competition  with  an  estabhshed  industry  is  not  the 
best  way  to  encourage  that  industry  to  develop 
itself. 

Mr.  Ritchie's  Local  Government  Act  of  1889  gave 
new  fife  to  our  Counties,  Towns,  and  Cities.  It  is 
not  too  much  to  say  that  it  was  the  basis  upon  which 
the  London,  the  Birmingham,  and  the  Glasgow  of 
to-day  have  been  built.  Modern  systems  of  sani- 
tation, locomotion,  town  planning,  and  education, 
have  not  been  brought  to  their  present  state  of 
efficiency  by  the  activities  of  officials  in  Whitehall. 
The  tremendous  strides  that  have  been  made  in 


m 


I 


5*  THE  TRADE  OF  TO-MORROW 

these  matters  within  the  last  five  and  twenty  years 
have  beenfTntirely  due  to  a  poUcy  of  devolution  and 
the  conferring  of  adequate  powers  upon  local 
authorities,  with  the  result  that  a  live  civic  spirit 
has  been  cultivated. 

In  exactly  the  same  way  the  full  development  of 
industry  will  never  be  attained  by  the  dabbling  of 
doctrinaires  in  Westminster  in  all  sorts  of  doubtful 
trading  speculations.  But  if  the  Government  will 
create  for  each  industry  an  authority  elected  upon 
a  proper  basis  and  modelled  upon  our  excellent  local 
authorHks,  then  the  life  and  well-being,  prosperity, 
and  expansion  of  each  industry  are  assured. 

To  carry  out  this  suggestion  would  amount  to 
the  endowment  of  Trade  Councils  with  statutory 
powders,  and  the  placing  upon  these  Councils  the 
responsibility  for  the  welfare  of  the  industries  which 
they  represent.  A  useful  thought  in  this  connection 
is  furnished  by  the  New  Statesman  Supplement  on 
Professional  Associations.  "  It  should,  we  think, 
be  a  matter  of  professional  honour  for  the  collective 
organisation  of  each  profession  to  see  to  it,  not 
merely  that  its  members  are  well  qualified  and 
properly  remunerated,  but  also  that  the  service  of 
the  profession  is  supplied  in  adequate  quantity  for 
the  needs  of  the  community,  not  only  the  rich  but 
also  the  poor."  The  New  Statesman  is  dealing 
with  professional  associations  :  the  argument  applies 
with  equal  force  to  trade  associations. 

If,  therefore,  we  could  add  to  the  other  minor 
revolutions  that  we  have  suggested,  the  setting  up 


(( 


AUDACITY"   IN  TRADE 


53 


of  a  statutory  authority  in  every  industry  to 
encourage  and  organise  the  efforts  of  those  engaged 
in  that  industry,  another  great  advance  towards  the 
£ioo  pec  head  would  have  been  made.  "  We 
want  to  think  in  larger  multiples,"  says  Mr.  Fisher, 
Minister  of  Education.  "  Our  business  ought  to  be 
organised  on  a  larger  scale  and  with  more  science. 
Until  we  get  into  the  habit  of  thinking  on  a  larger 
scale,  both  with  regard  to  the  organisation  of  busi- 
ness and  the  scientific  equipment  which  should 
serve  those  businesses,  we  are  not  in  a  fair  way  to 
achieve  any  very  great  results  in  applied  science." 

Last,  and  by  no  means  least,  we  must  get  rid  of 
the  small  mind,  especially  the  small  mind  in  big 
places.  That  is  one  of  the  greatest  dangers  which 
confront  the  nation  at  the  present  moment.  We 
have  too  many  small-minded  faddists  in  all  these 
new  Government  Departments  and  Directorates, 
and  the  fear  is  that  some  of  these  people,  having 
secured  the  ear  of  those  in  authority,  may  induce 
the  State  to  embark  upon  silly  small  schemes, 
schemes  which  are  not  within  the  province  of  the 
State  and  which  cannot  be  properly  understood  in 
Whitehall. 

The  small  mind  is  useful  enough  in  its  way,  but 
it  must  not  be  tolerated  at  the  centre  of  Govern- 
ment. The  establishment  of  a  system  of  devolu- 
tion for  industry,  the  setting  up  of  Trade  Councils 
in  every  industry,  the  confining  of  the  thought  and 
effort  of  Government  to  the  principles  of  governing, 
will  leave  plenty  of  scope  for  all  these  faddists  to 


54 


THE  TRADE  OF  TO-MORROW 


put  their  schemes  before  the  practical  men  who  will 
be  found  upon  the  numerous  Trade  Councils. 

A  new  vista  will  appear  when  once  the  principle 
of  national  interest  in  trade  is  admitted,  and 
undreamed-of  possibiUties  will  come  to  light  when 
we  begin  the  study  of  whole  trades,  one  trade  at  a 
time. 

But  to  come  back  to  Mr.  Lloyd  George  and 
audacity.  One  is  tempted  to  express  all  sorts  of 
dreams  which,  although  they  may  be  dreams,  are  not 
so  unpractical  as  they  appear.  The  trade  of  the  future 
is  charged  with  the  duty  of  providing  the  world 
with  the  best  of  everything.  There  is  no  end  to  its 
opportunities  and  no  limit  to  its  possibihties.  For 
instance,  the  work  of  giving  every  man,  woman, 
and  child  in  these  islands  the  opportunity  for  a 
warm  bath  every  day,  expressed  in  terms  of  trade, 
represents  an  order  for  about  one  hundred  million 
pounds'  worth  of  goods.  If  similar  advantages  could 
be  extended  to  the  Western  Hemisphere  alone,  to  say 
nothing  of  the  whole  globe,  it  would  mean  in  terms 
of  trade  unending  employment  to  the  masters  and 
men  engaged  in  the  manufacture  of  baths  and  hot- 
water  apparatus.  But  the  hot  bath  is  by  no  means 
the  height  of  ambition  as  present-day  ideas  run. 
Everybody  wants  a  more  frequent  change  of  linen, 
more  furniture,  more  variety  of  food,  more  amuse- 
ments, more  recreation,  more  books,  more  light 
and  heat,  more  of  every  imaginable  amenity  of  life. 
And  the  satisfaction  of  these  needs  represents  enough 
w^ork  to  keep  us  all  engaged,  with  the  assistance  of 


!! 


"AUDACITY"  IN  TRADE 


55 


the  best  machinery,  for  generations  to  come.  And 
then,  before  these  requirements  are  one-tenth  filled, 
many  new  needs  will  have  arisen.  In  fact,  demand 
will  always  be  ahead  of  supply  if  only  the  right 
ideas  are  kept  uppermost  in  mind. 

In  considering  the  possibilities  of  trade  expansion, 
we  have  confined  our  remarks  to  the  paltry  ambi- 
tion of  £ioo  per  head  in  exports,  but  we  hesitated 
at  the  beginning  of  these  notes  for  fear  of  giving 
too  great  a  shock  to  the  reader.  We  dare  now  to  go 
beyond  that  aspiration.  The  £ioo  per  head  is  not 
a  sufficiently  ambitious  mark  to  set  before  ourselves. 

The  last  Census  of  Production  proved  that  the 
net  output  per  workman  employed  in  factories  in 
Great  Britain  amounted  to  £102.  In  that  simple 
fact  one  discovers  the  reason  for  the  limitation  that 
has  to  be  placed  upon  the  earnings  of  the  industrial 
classes.  For  if  the  workman  were  to  succeed  by 
agitation  in  securing  the  whole  of  the  £102  which 
he  produced,  he  would  not  then  have  reached  any- 
where near  the  point  which  he  had  set  himself  as 
his  standard  of  comfort. 

Let  us  assume  therefore,  in  the  audacious  mood 
which  we  have  adopted  for  the  purpose  of  these 
notes,  that,  by  making  production  fashionable,  you 
have  doubled  the  number  of  producing  hands  : 
and  then  add  to  these  sufficient  automatic  and 
labour-saving  machinery  to  make  the  output  ^^500 
per  worker.  If  these  two  assumptions  are  not 
impossible  you  would  increase  our  output,  our  pro- 
duction, our  real  wealth  as  a  nation,  ten  times. 


56 


THE  TRADE  OF  TO-MORROW 


This  is  undoubtedly  overstating  the  case,  but  we 
plead  Mr.  Lloyd  George's  "  audacity." 

It  must  not,  therefore,  be  assumed  that  we  can 
exhaust  the  possibilities  of  trade  by  means  of  an 
increase  in  exports  alone.  The  field  for  develop- 
ment in  home  trade,  home  consumption,  and  there- 
fore home  comfort,  is  equally  inexhaustible. 

The  elected  Trade  Councils  would,  of  course,  be 
concerned  with  quality  as  well  as  quantity  ;  the 
two  things  must  go  together.  They  would  give 
full  scope  for  the  forces  of  art  and  science  to  make 
themselves  felt  in  our  industries.  These  forces  are 
largely  ineffective  to-day,  owing  to  the  absence  of 
that  collective  and  co-operative  spirit  upon  which 
they  both  so  largely  depend. 


V 


CHAPTER  VI. 

THE  THIRD  PARTNER. 

Next  to  the  war,  our  trade  is  the  question  which 
should   be   uppermost   in   our   minds.    The   well- 
being  of  our  industries  is  the  foundation  upon  which 
every  other  form  of  national  life  depends.      The 
success  of  British  trade  in  the  past  has  been  one  of 
our  greatest  achievements.    We  have  always  led 
the  world  of  commerce,  and  so  far  no  rivals  have 
succeeded  in  taking  that  position  from  us.     But 
the  war  has  called  a  halt,  and  given  us  time  to  review 
our  position,  and  we  have  now  discovered  that 
competition  is  much  stronger  than  we  had  realised. 
The  war  has  done  something  else— it  has  made  us 
poorer,    it   has    created  a   necessity  for   a    great 
increase  in  our  trade,  and   has  brought  about  a 
situation   where    new    methods,    new    ideas    and 
drastic  alterations  have  become  essential. 

In  these  circumstances  it  is  natural  that  all  sorts 
of  plans  should  be  produced  and  pushed,  and  from 
out-and-out  Utopians  downwards  schemes  are  being 
advanced  by  the  dozen. 

Mr.  H.  G.  Wells  wants  to  do  away  with  "  the  little 

57 


5S  THE  TRADE  OF  TO-MORROW 

man  in  the  office  "  ;   Sir  Leo  Chiozza  Money  wants 

to  turn  the  State   into   a  wholesale  grocer-    Mr 

Sidney    Webb    stands    for    nationalisation;'    Mr' 

Lloyd  George,  armed  with  Defence  of  the  Realm 

Acts,  starts  the  State  upon  a  career  as  "  the  largest 

firm  on  earth,-  running  anything  from  public-houses 

to  shipyards  ;   Mr.  Hughes  is  determined  that  not 

one  tmy  rootlet  of  the  upas  tree  of  German  trade 

shall  remain  ;   and  so  on. 

Conferences  are  held  ;    Royal  Commissions  and 
?^r^  Committees    spring    up  like  mush- 

rooms ;  every  few  minutes  another  Chamber  of 
Commerce  or  other  self-appointed  and  unrepresenta- 
tive  body  comes  into  being  ;  Trade  Unions  pass 
resolutions ;  and  the  ordinary  human  mind  is 
sta^ered  with  the  welter  and  chaos  of  it  all 

The  outstanding  problems  are  as  numerous  as 
they  are  varied.      The  capture  of  German  trade, 
the  trebhng  of  our  revenue,  the  employment  of  our 
soldiers,  the  cheapening  of  production,  the  increase 
01  output,  the  development  of  the  resources  of  the 
limpire,  the  improvement  of  the  general  standard 
of  hving,  are  some  of  the  leading  questions.     There 
IS  m  all  conscience  enough  to  do,  and  the  question 
wmcii  is  in  the  minds  of  most  of  the  thinkers  on 
these  matters  is,  "  What  part  should  the  State  take 
in  ail  these  movements  ?  " 

William  Whiteley,  the  pioneer  of  the  multiple 
department   business  in  this   country,   succeeded 
because  he  decHned  to  dabble  in  detail  •   he  dele 
gated  responsibiUty,  he  put  experts  in  every  depart- 


THE  THIRD  PARTNER 


59 


ment  and  left  it  to  them  ;  he  contented  himself  with 
the  work  of  supervising.  The  British  Empire  may 
be  likened  to  a  great  multiple  department  concern, 
and  the  Whiteley  principle— the  expert  and  delega- 
tion—is the  only  basis  upon  which  it  can  be  success- 
fully managed.  The  one  necessity  to  Whiteley 
was  turnover,  and  the  one  necessity  to  the  Empire 

is  output. 

The  position  of  the  State  in  relation  to  industry 
may  be  likened  to  that  of  a  debenture  holder  in  a 
trade  corporation.     The   debenture   holder    is   in 
fact  the  supreme  authority  and  exercises  a  benefi- 
cent   influence    over    the    Company's  operations : 
and  yet,  in  the  ordinary  way  and  so  long  as  things 
go  well,  he  takes  no  part  in  the  active  working  of 
the  business  of  the  Company.    A  debenture  holder 
in  a  Limited  Company  is  not  even  privileged  to 
vote  at  its  Annual  General  Meeting.    He  is  seldom 
represented  on  the  Board.    His  interests  are  watched 
over  by  Trustees,  whose  duties  in  the  case  of  a 
successful  enterprise  are  purely  nominal.     But  if 
things  go  wrong,  if  there  is  any  fear  of  dangerous 
competition    damaging    the    Company's    security, 
or  any  reason  to  suppose  that  things  are  not  as  they 
should  be,  then  the  debenture  holders  appoint  a 
Receiver,  and  the  Directors,  Managers,  Shareholders, 
and  others  have  to  bow  to  his  authority. 

There  are  really  three  parties  interested,  deeply 
interested,  in  the  prosperity  of  each  industry: 
(I)  The  State,  (2)  Labour,  (3)  Capital.  These  three 
parties  should  be  in  partnership  for  the  purpose  of 


fi 


60         THE  TRADE  OF  TO-MORROW^ 

promoting  the  welfare  of  each  trade.  The  partner- 
ship might  well  be  compared  to  the  constitution  of 
a  Limited  Company,  in  which  the  position  of  the 
debenture  holder  was  occupied  by  the  State  the 
position  of  the  preference  shareholder  by  Labour 
and  that  of  the  ordinary  shareholder  by  Capital 

In  considering  the  relations  of  the  Government  to 
trade  and  industry,  it  may  be  convenient  to  inquire 
what  It  is  that  the  nation  wants  from  trade  This 
simple  question  has  in  the  past  been  confused  with 
side  issues  which  have  almost  entirely  monopolised 
the  discussion.  We  have  got  into  the  habit  of 
giving  the  whole  of  our  mind  to  problems  like  Free 
Trade  and  Protection,  or  Work  and  Wages,  and  it 
seems  to  me  that  we  have  now  to  go  back  a  little  and 
consider  the  primary  interests  of  the  nation  in 
industry. 

If  we  take  the  Boot  Trade  as  an  example,  and  look 
at  It  from  a  national  point  of  view,  we  find  a  few 
hundred  so-called  masters  representing  a  few  millions 
of  capital  at  present  in  control  of  the  trade  Next 
there  is  a  much  larger  body  of  managers,  salesmen 
accountants,  travellers,  shippers,  and  wholesale 
and  retail  shopkeepers.  Last  and  most  important, 
there  is  an  army  of  operatives  engaged  in  the  actual 
work  of  manufacturing  boots. 

Looking  at  the  matter  from  the  national  point 
of  view  only,  and  ignoring  for  the  moment  the 
interests  of  the  trade,  the  best  thing  that  can  happen 
IS  that  the  maximum  quantity  of  the  best  boots 
should  be  produced,  that  the  proportion  of  boots 


THE  THIRD  PARTNER 


6i 


to  population  should  be  high,  that  the  largest 
possible  number  of  pairs  of  boots  should  be  sent 
abroad.  That,  it  seems  to  me,  is  the  national  point 
of  view. 

Next  we  arrive  at  a  number  of  secondary  considera- 
tions such  as  foreign  competition,  involving  ques- 
tions like  tariffs,  and  wages,  and  profits,  which  are 
domestic  questions  as  between  the  different  persons 
who  go  to  make  up  the  Boot  Trade.  But  the  first 
essential  is  the  production  of  the  maximum  quantity, 
and  adequate  arrangements  for  the  disposal  of  that 
production,  a  problem  which  so  far  as  I  am  aware 
has  never  attracted  the  interest  of  the  politician 
or  of  the  Government. 

A  further  study  of  the  boot  industry  will  show 
that  the  small  body  of  masters  who  control  the 
capital  and  are  in  command  of  the  trade  are  able 
to  stop  production  altogether  if  it  suits  their  financial 
interests  to  do  so.  On  the  other  hand,  the  opera- 
tives, well  organised  in  trade  unions,  possess  to-day 
the  power  to  call  a  strike  and  inflict  harm  not  only 
upon  the  Boot  Trade  but  upon  the  nation. 

Or  again,  the  price  of  money  or  the  opportunities 
for  investment  may  so  alter  as  to  make  it  w^orth 
the  while  of  the  capitalists  interested  in  boots  to 
take  their  capital  away,  thereby  throwing  the  opera- 
tives out  of  work,  robbing  the  nation  of  its  boot 
trade,  and  sending  the  industry,  lock,  stock,  and 
barrel,  to  Germany  or  America. 

This  sort  of  thing  has  happened  many  times. 
There  is  no  authority  which  can  watch  the  national 


0 


62  THE  TRADE  OF  TO-MORROW 

interests  in  these  matters.  The  British  Boot  Trade 
to-day  depends  upon  the  accident  that  a  certain 
number  of  capitahsts,  managers,  and  workpeople, 
in  their  own  discretion,  think  it  worth  their  while 
to  engage  in  the  manufacture  of  boots. 

"  We  all  know  that  no  Government  before  the 
war  thought  for  a  moment  that  the  magnitude  of 
our  iron  and  steel  industry  was  a  subject  in  which 
the  theory  of  government  was  concerned,  and  we 
are  paying  now  for  the  old  neglect." 

"  Let  us  suppose  that  a  well-equipped  Ministry 
of  Commerce,  collecting  continuously  accurate 
records  of  progress  in  every  industry,  possessed 
the  practical  means  of  making  prompt  and  direct 
representations  to  the  members  of  any  trade.  Let 
us  imagine  also  that  it  was  found  that  an  important 
trade  was  becoming  stagnant,  as  our  iron  industry 
became  stagnant  before  the  war.  The  Ministry  of 
Commerce  would  make  it  its  business  to  call  the 
iron  trade  association  together,  and  to  discuss  the 
whole  situation  with  its  members.  If  it  failed  to 
secure  from  the  trade  the  assurance  of  progress,  and 
if  the  national  interest  demanded  a  larger  output,  as 
it  most  certainly  did  in  the  particular  case  referred  to, 
it  would  become  the  duty  of  the  Minister  of  Com- 
merce to  devise  means  to  enlarge  the  production, 
whether  by  way  of  stimulating  the  supply  of  capital! 
or  otherwise."! 

Does  it  not  become  evident  that  the  duty  of  the 

Sir  Leo  Chiozza  Money,  Evening  News,  July  24th,  1916. 


THE  THIRD  PARTNER 


(>Z 


Government,  as  part  of  the  process  of  governing, 
is  to  make  such  arrangements  that  this  nation  shall 
occupy  a  proper  place  in  every  sphere  of  trade  ? 
If  the  Government  were  to  insist  upon  some  form  of 
organisation  which  would  give  to  every  manufacturer 
and  every  workman  the  opportunity  of  being  repre- 
sented, it  could  spend  public  money  in  the  develop- 
ment of  an  industry,  and  that  money  would  be 
spent  on  interests  which  are  truly  national.  I  sub- 
mit that  the  maintenance  of  output  in  every  trade 
is  a  proper  matter  for  the  consideration  of  the 
Government. 

The  work  of  the  Government  in  assisting  industry 
should  take  the  form  of  organisation,  direction  or 
control,  rather  than  of  direct  Government  interven- 
tion in  actual  trading  transactions.  The  business 
of  Imperial  Parliament  is  not  to  do  things,  but  to 
set  up  the  proper  authority  in  every  branch  of 
national  activity.  We  must  never  forget  the  com- 
plicated nature  of  trade  and  industry,  the  inter- 
dependence of  one  branch  upon  another,  the  necessity 
for  all  sorts  of  middlemen,  speculators  and  agents. 
In  working  this  complicated  machine  every  part 
reacts  upon  the  other  parts,  and  when  the  Govern- 
ment goes  out  of  its  way  to  dabble  in  trade  it  always 
finds  that  it  is  involved  in  difficult  complications. 
The  Government  should  encourage  the  activities 
of  traders  and  not  attempt  to  compete  with  them. 

There  is  a  general  outcry  at  the  present  moment 
for  Government  assistance  in  connection  with 
trade.    The   commonest   form   that   this   demand 


^i 

w 


64 


THE  TRADE  OF  TO-MORROW 


takes  is  a  call  for  a  Minister  of  Commerce.  The 
answer  of  the  Government  to  this  outcry  is  the 
appointment  of  great  numbers  of  little  Committees, 
all  lacking  in  representative  character  or  authority, 
and  each  attempting  to  deal  with  some  little  detail. 

"  We  are  going  about  the  business  of  our  national 
future  like  a  family  which  is  acquiring  an  auto- 
mobile, by  sending  father  out  to  get  some  sort  of 
good  engine,  it  doesn't  matter  what,  mother  to 
back  her  fancy  in  carburettors,  Frankie  to  get 
acetylene  headlights,  Bertie  to  buy  wheels,  and 
Georgie  to  buy  tyres,  regardless  of  each  other 
and  the  weight  and  size  of  the  whole,  leaving  the 
rest  of  the  equipage  to  happen  somehow,  while 
sister  Beatrice  sits  at  home  inquiring  into  the  re- 
spective merits  of  the  petrol  and  the  steam  engine, 
and  Caroline  looks  through  the  accounts  to  find  out 
whether  the  family  can  afford  to  set  up  a  car  of 
any  sort  at  all. 

"  Economic  reconstruction  must  be  a  general 
act.  It  is  an  idle  dream,  and  all  too  prevalent 
a  dream,  to  suppose  that  any  great  economic 
reorganisation  can  be  brought  about  by  quiet 
meetings  of  bankers  and  big  business  men  and 
unobtrusive  bargains  with  Government  depart- 
ments."* 

Our  trade  and  commerce  is  Ihe  only  part  of  our 
national  life  which  is  not  organised  upon  a  represen- 
tative basis.  There  are  vast  stores  of  energy, 
ability,  and  genius  in  business,  half  of  which  is 

*  •'  Elements  of  Reconstruction." 


THE  THIRD  PARTNER 


65 


now  wasted  owing  to  lack  of  cohesion  and  organisa- 
tion. The  Government  must  deal  with  trade  in  a 
^  much  bigger  way.  It  must  learn  to  think  in  hun- 
dreds of  milUons  and  ignore  details.  It  should 
not  dabble  in  trade  any  more  than  it  dabbles  in 
local  affairs.  Its  true  function  is  to  set  up  proper 
authorities  in  each  trade,  just  as  proper  authorities 
are  set  up  in  each  locaHty.  In  trading  matters 
the  Government  ought  to  prescribe  and  not  dis- 
pense. 

A  glance  at  the  history  of  Local  Government  will 
help  the  argument.  In  the  eighteenth  century, 
when  the  inhabitants  of  any  district  wanted  to 
pave  the  streets  or  to  make  any  local  improve- 
ment, they  formed  a  society  and  shared  the  cost 
voluntarily  among  the  members.  These  voluntary 
societies  gradually  transformed  themselves,  generally 
by  special  Acts  of  Parliament,  into  various  bodies 
of  Road  or  Harbour  or  Street  or  Lighting  Com- 
missioners, which  levied  compulsory  rates,  and 
acted  in  the  name,  not  of  this  or  that  exclusive 
group,  but  of  all  the  local  residents. 

It  will  thus  be  seen  that  in  trading  matters 
we  are  in  the  same  position  as  we  were  in  the 
eighteenth  century  in  matters  of  local  government. 
We  have  our  voluntary  associations  struggling 
with  the  impossible  task  of  organising  our  trades  : 
impossible,  because  these  organisations  have  no 
authority,  are  not  representative,  in  fact,  in  most 
cases  have  no  legal  status.  They  do  the  best 
they  can  in    the    same  way  that  the  voluntary 

£ 


66 


THE  TRADE  OF  TO-MORROW 


THE  THIRD  PARTNER 


67 


i  ( 


ii  i 


bodies  attempted  to  tackle  the  problems  of  local 
sanitation.  The  possibilities  for  improvement  in 
our  trading  position  by  the  proper  appUcation  of 
Government  help,  are  as  great  to-day  as  they  were 
two  centuries  ago  in  improving  our  local  adminis- 
tration. 

If  the  Government  would  give  up  all  the  many 
ways  in  which  it  is  playing  at  trade,  and  give 
the  advantage  of  its  recognition  to  properly  con- 
stituted councils  of  industry,  our  position  would 
be  immeasurably  strengthened. 

I  have  already  dipped  into  the  fund  of  suggestions 
contained  in  the  letters  to  The  Times,  on  the 
"  Elements  of  Reconstruction,"  but  the  ideas  of 
these  authors  are  so  pertinent  to  our  subject  that 
they  must  be  mentioned.  They  go  a  good  deal 
farther  than  I  am  prepared  to  go,  and  challenge 
the  constitution  of  Imperial  Pariiament  itself. 
They  call  attention  to  the  fact  that  we  have  on 
the  one  hand  representatives  of  such  places  as 
Croydon  or  Hampstead  or  Battersea,  whose  in- 
habitants have  scarcely  anything  in  common 
except  a  postal  address,  and  that,  on  the  other 
hand,  if  we  want  to  deal  in  any  satisfactory  way 
with  the  transport  workers  or  railway  servants 
or  medical  men  or  electrical  engineers,  we  have 
to  go  outside  the  formal  constitution  altogether 
and  discuss  matters  with  trade  and  professional 
organisations  that  have  neither  legislative  nor 
administrative  power,  that  may  not  represent  the 
entire  profession  or  industry  concerned,  and  that 


are  often  mere  organisations  for  restricting  work 
and  raising  wages,  without  any  tradition  or  sense 
of  public  function. 

They  suggest  that  the  shortest  way  to  economic 
reorganisation  may  lie  in  lifting  most  of  the  tasks 
out  of  the  scope  of  the  Legislature  altogether,  in 
largely  increasing  the  powers  and  scope  and  respon- 
sibilities of  the  great  labour  organisations,  in  bring- 
ing both  them  and  the  national  councils  of  the 
employers  and  proprietors  of  the  great  industries 
into  the  structure  of  the  Constitution,  in  insisting 
upon  joint  conferences  and  joint  action,  and  in 
leaving  Pariiament  Httle  more  than  the  power  to 
endorse  or  veto  the  outcome  of  these  joint  dehbera- 
tions. 

I  am  not  prepared  to  follow  these  writers  in 
their  larger  criticism  of  Imperial  Parliament.  It 
is  very  necessary,  in  my  judgment,  that  Members 
of  Pariiament  should  be  as  free  as  possible  from 
direct  connection  with  any  interests,  and  if  the 
principle  of  representation  of  districts  has  lost 
its  original  meaning,  I  should  rejoice  to  think  that 
our  legislators  were  to  that  extent  more  free  from 
local  or  particular  prejudice.  Pariiament  has  a 
great  deal  to  do  apart  altogether  from  trade  and 
commerce,  and,  for  my  part,  I  should  be  quite  pre- 
^  pared  to  leave  it  alone  if  only  it  would  consent  to 
leave  trade  details  alone,  and  to  delegate  its  powers 
in  these  matters  to  properiy  constituted  authorities. 
Such  help  as  the  Government  now  gives  to  trade 
is  open  to  the  objection  that  it  involves  the  spending 


68 


THE  TRADE  OF  TO-MORROW 


THE  THIRD  PARTNER 


69 


1 1 


of  public  money  for  the  furtherance  of  private 
interests.  If  those  private  interests  were  merged 
into  national  interests,  pubHc  money  could  be 
freely  spent,  and  certainly  it  will  have  to  be  spent 
in  very  large  amounts,  on  the  promotion  and  main- 
tenance of  our  trade  and  commerce. 

Government  help  in  trading  matters,  as  at  present 
given,  is  open  to  the  further  objection  that  it  is 
generally  the  result  of  personal  influence.  If  the 
Government  think  it  wise  to  spend  money  upon 
education  or  research  or  anything  else,  in  connection 
with  boots  or  leather,  that  money  ought  to  be 
spent  upon  the  advice  and  with  the  assistance  of 
the  properiy  elected  representatives  of  the  boot 
industry,  and  not  at  the  request  of  some  Member 
of  Pariiament  who  happens  to  be  interested  and 
to  have  the  ear  of  one  of  the  Government 
Departments. 

There  is  the  further  objection  about  the  present 
haphazard  method,  that  when  the  Government 
comes  to  the  aid  of  a  small  body  of  traders,  there 
is  generally  another  body  of  similar  traders  who 
feel  aggrieved  that  they  have  not  shared  in  the 
benefits  secured. 

The  setting  up  of  properiy  constituted  public 
authorities  in  each  industry  would  greatly  facili- 
tate the  work  of  the  Government  in  promoting 
our  trade.  There  would  be  an  end  of  all  the  hole- 
and-corner  private  arrangements  which  are  the 
cause  of  so  much  trouble  and  discussion 

Whatever    reorganisation    is    attempted    ought 


v\ 


to  be  done  in  the  dayhght.  It  ought  to  be  done  in 
such  a  way  as  to  inspire  confidence.  It  ought  to 
be  free  from  any  of  the  abuses  of  nomination  or 
influence.  I  have  the  greatest  respect  for  a  Mem- 
ber of  Parliament,  but  a  Member  of  Parliament 
is  very  seldom  a  representative  trader.  He  is 
not  as  a  rule  identified  with  the  interests  of  any 
particular  trade  ;  if  he  is  he  ought  not  to  be.  His 
duty  is  to  watch  the  interests  of  all  trades  and  of 
the  nation  as  a  whole.  What  does  the  honourable 
member  for,  say,  the  Whitechapel  Division  of  the 
Tower  Hamlets,  as  such,  know  about  the  cotton 
trade  ?  To  put  upon  the  representative  of  White- 
chapel the  work  of  arranging  cotton  matters 
seems  very  like  delegating  to  churchwardens  the 
task  of  compihng  railway  time-tables. 

Apart  from  the  numerous  activities  of  the  Govern- 
ment in  connection  with  different  branches  of 
industry,  the  Government  professes  to  render 
assistance  to  trade  through  the  Consular  Service, 
and  such  institutions  as  the  Commercial  Intelhgence 
Branch  of  the  Board  of  Trade.  The  latter  is  so 
small,  and  its  activities  are  so  minute,  that  it  has 
escaped  much  criticism,  but  the  Consular  Service 
has  for  years  been  the  butt  of  writers  on  trading 
matters.  The  trouble  with  these  institutions 
arises  from  a  failure  to  understand  the  first  prin- 
ciples of  trade.  The  only  possible  way  to  deal  with 
the  trading  problem  is,  as  I  have  already  said  two 
or  three  times,  to  take  it  trade  by  trade,"  one  trade 
at  a  time. 


70 


THE  TRADE  OF  TO-MORROW 


THE  THIRD  PARTNER 


71 


f 


The  stupid  idea  that  some  unfortunate  official, 
sent  at  the  public  expense  to  a  distant  part  of  the 
world,  can  be  of  any  real  assistance  to  all  the  varied 
interests  covered  by  British  commerce,  requires 
to  be  abandoned.  The  Consul,  especially  in  a 
foreign  State,  is  there  for  the  purpose  of  attending 
to  the  formalities  connected  with  passports,  bills 
of  lading,  registration  of  births,  deaths,  and 
marriages,  and  other  similar  details.  It  is  quite 
erroneous  to  suppose  that  he  can  do  anything 
worth  the  name  in  the  promotion  of  British  trade. 

The  failure  of  the  Commercial  Intelligence 
Branch  to  give  commercial  intelligence  that  is 
worth  having  is  now  admitted  in  the  announce- 
ment that  was  made  last  November,  that  any  in- 
quiries for  information  of  importance  will  be  sent 
to  the  Imperial  Institute,  while  the  Commercial 
Intelligence  Branch  will  continue  as  heretofore  to 
give  immediate  replies  to  any  inquiries  for  goods 
that  are  well  known  or  easily  obtainable.  If  every 
trade  were  properly  organised,  each  would  have 
its  own  commercial  intelligence  branch,  staffed 
by  men  who  understand  the  trade  and  who  alone 
are  able  to  collect  such  intelligence  as  is  wanted 
by  each  particular  industry. 

The  relations  of  the  Government  to  trade  want 
putting  upon  an  entirely  new  basis.  A  new  national 
organisation  should  therefore  be  established  which 
will  retain  all  the  sterUng  qualities  of  our  present 
system,  and  add  to  them  the  necessary  force  to 
ensure  greater  activity. 


"  The  improved  organisation  that  is  now  sug- 
gested would  contain  nothing  that  is  new  or  un- 
tried. It  would  consist  of  natural  developments 
of  what  already  exists.  Employers  and  work 
people  have  organised  themselves  into  associations 
and  unions ;  some  of  these  have  developed  federa- 
tions of  similar  or  even  of  unconnected  interests, 
and  both  parties  have  their  national  congresses, 
or  at  any  rate,  the  germ  of  them.  The  demand 
now  is  that  the  organisations  already  in  existence 
be  perfected."! 

In  considering  the  possibilities  of  a  connection 
between  the  State  and  trade,  the  question  of  in- 
itiative arises.  I  am  frequently  told  that  the  first 
step  should  come  from  the  trades  themselves,  that 
there  ought  to  be  a  general  demand  on  the  part  of 
the  trade  unions  and  associations  for  Government 
recognition  and  help.  I  believe  that  the  initiative 
must  come  from  the  Government.  Manufacturers 
are  interested  in  prices,  workpeople  are  interested 
in  wages,  and  both  have  done  a  great  deal  to  pro- 
mote their  respective  objects.  I  suggest  that  there 
is  a  more  important  interest  in  trade  than  either 
of  these  two,  the  interest  of  the  nation,  and  that 
the  nation  as  Third  Partner  should  take  active 
steps  to  promote  that  interest. 


*  Professor  Kirkaldy. 


GETTING  RID  OF  SHIBBOLETHS       yz 


& 


CHAPTER  VII. 
GETTING  RID  OF  SHIBBOLETHS. 

"  The  readier  we  are  to  cut  away  from  the  past, 
the  better  are  we  likely  to  succeed,"   says  Mr! 
Lloyd  George  ;  and  in  attempting  to  study  the 
question  of  trade  it  seems  to  me  that  one  of  the 
first  things  to  do  is  to  clear  the  mind  of  several 
old  ideas.     August,  1914,  marked  the  end  of  the 
trading  world  as  we  knew  it.    Certainly  in  matters 
like  money  or  production,  the  terms  and  figures 
with  which  we  were    familiar    are    now    useless. 
We  are  already  doing  all  sorts  of  things  which  a 
couple  of  years  ago  would  have  been  scouted  as 
impossible.     I   remember   a   conversation   with   a 
financier  in  the  autumn  of  1914,  who  gave  me  the 
comforting  assurance  that  the  war  must  come  to 
an  end  in  the  first  few  months  of  1915,  for  the  simple 
reason  that  by  that  time  all  the  available  money 
would  have  been  used  up.     Since  those  days  we 
have  all  learnt  that  there  is  no  such  thing  as  money : 
it  turns  out  to  be  nothing  but  a  lot  of  book  entries 
in  a  bank.    A  Government  which  within  the   re- 

71 


collection  of  each  of  us  was  content  with  £90,000,000 
a  year,  now  spends  nearly  £3,000,000,000  a  year ;  the 
ammunition  which  was  sufficient  to  carry  through 
the  whole  of  the  South  African  War  is  now  used 
up  in  a  few  days,  and  everything  is  altering  in  the 
same  sort  of  proportion. 

Does  it  not,  therefore,  become  needful  to  recog- 
nise that  old  arguments,  old  theories,  and  old 
standards  do  not  necessarily  apply  to  the  present 
or  the  future  ? 

We  have  for  generations  occupied  ourselves  with 
discussions  on  work  and  wages.  I  submit  that 
that  subject  now  becomes  a  comparatively  minor 
issue.  We  are  face  to  face  with  the  much  greater 
question  of  our  very  existence  as  a  trading  nation. 
The  problem  to-day  is  not  only  the  distribution  of 
wealth,  but,  even  more  important,  the  actual 
making  of  wealth.  Writing  in  1843,  Carlyle  de- 
clared : — 

"  This  largest  of  questions,  this  question  of  work 
and  wages,  which  ought,  had  we  heeded  Heaven's 
voice,  to  have  begun  a  generation  ago  or  more, 
cannot  be  delayed  longer  without  hearing  earth's 
voice." 

For  over  seventy  years  we  have  continued  "  this 
largest  of  questions,  this  question  of  work  and 
wages,"  and  if  one  is  to  believe  some  of  the  debaters 
on  the  matter,  very  little  progress  has  been  made 
with  it. 

I  think  that  most  of  the  discussions  on  this 
subject  in  the  past  have  missed  the  real  point. 


74 


THE  TRADE  OF  TO-MORROW 


"H^ 


Too  many  students  of  economics  have  a  way  of 
dealing  with  money  or  with  goods  as  if  they  were 
fixed  quantities,  and  for  seventy  years  they  have 
argued  about  the  possession  of  these  supposed  fixed 
quantities,  with  the  result  that  we  are  still  in  the 
stage  that  Carlyle  had  reached  in  1843.  Far  too 
little  attention  has  been  paid  to  the  question  of 
Production. 

Wages  and  profits  are  one  and  the  same  thing. 
There  should  be  no  antagonism  between  them : 
they  are  wrongly  conceived  as  robbing  one  another. 
They  both  depend  upon  output  and  organisation. 

Perhaps,  before  proceeding  further,  it  would  be 
well  to  define  the  scope  of  our  inquiry  into  trade, 
to  define  what  we  mean  by  trade  and  com- 
merce. Some  people,  especially  politicians,  are 
incHned  to  think  that  when  they  deal  with  railways, 
shipping,  insurance,  banking,  weights  and  measures, 
bankruptcy  laws,  patents,  trade  marks,  and  various 
other  general  commercial  questions,  they  are  dealing 
with  trade.  But  these  things,  although  of  the 
utmost  importance,  are  really  only  incidents  of 
trade,  by  which  term  we  shall  mean  the  selling  and 
making  of  goods. 

Note  the  order  in  which  I  place  these  two 
functions.  The  law  of  supply  and  demand  re- 
quires first  a  demand  and  then  a  supply,  but 
the  word  "  demand  "  used  in  this  connection  is, 
I  think,  unfortunate.  It  is  at  least  open  to  a  good 
deal  of  misconception.  There  is  room  for  a  new 
branch  of  economics  which  would  recognise  that 


h 


GETTING  RID  OF  SHIBBOLETHS       75 

the  problems  of  selling  rival  in  importance  the 
problems  of  production.  This  point  has  a  vital 
bearing  on  many  questions.  The  limitation  of 
output  by  Trade  Unions  was  justified  by  the  fear 
of  a  glut  due  to  inability  to  dispose  of  the  work 
produced.  A  glut  of  manufactured  articles  is 
only  possible  where  there  is  failure  in  the  selling 
part  of  the  organisation. 

To  bring  the  law  of  supply  and  demand  right 
down  to  modern  conditions,  one  example  will 
suffice — the  American  typewriter.  If  you  will 
take  your  minds  back  to  the  days  when  the  American 
typewriter  manufacturers  were  attempting  to  in- 
troduce their  wares  into  this  country,  you  will 
remember  that  they  were  received  with  small 
favour.  The  most  aggressive  advertising,  the  most 
elaborate  selling  schemes,  armies  of  travellers, 
machines  on  free  trial,  and  all  sorts  of  devices,  were 
adopted  to  persuade  the  conservative  Britisher 
that  it  was  desirable  or  advisable  to  use  a  machine 
for  the  purpose  of  writing.  Less  than  twenty 
years  have  been  sufficient  so  to  alter  the  position, 
that  the  trader  who  declines  to  use  the  typewriter 
cannot  even  get  his  correspondence  read. 

Now  if  the  American  had  accepted  the  usual 
British  interpretation  of  the  law  of  supply  and 
demand,  this  country  would  be  without  its  type- 
Nvriters  to-day  ;  but  the  people  at  the  back  of  that 
movement  recognised  that  that  law  was  not  only 
concerned  with  some  urgent  demand  which  existed 
by  nature,  but  that  it  was  possible  to  create  a 


76 


THE  TRADE  OF  TO-MORROW 


/ 


demand  and  then  provide  the  supply.  We  have 
to  stretch  our  imagination  to  the  day  when  every 
Chinee  will  be  on  the  'phone,  every  Patagonian 
baby  will  need  a  perambulator,  and  every  Zulu  a 
motor-bicycle.  The  interest  of  the  State  in  trade 
is  that  we  should  supply  such  goods  instead  of  the 
German,  the  American  or  the  Japanese,  and  the 
question  for  the  State  to  answer  is,  "How  are 
these  things  to  be  done,  and  who  are  the  people 
to  do  them  ?  " 

There  is  one  other  old  idea  that  wants  careful 
examination.     If  one  is  to  beheve  the  newspapers, 
we  are  all  engaged  in  giving  up  old  shibboleths, 
discarding  old  fetishes,  and  I  think  that  the  fetish 
of  the  consumer  has  had  its  day.     There  is  some- 
thing which  appeals  to  the  soul  of  an  economist  in 
the  consumer,  while  the  poor  producer  is  almost 
invariably   a   rogue.     Surely,    judged   by   national 
values,  the  producer  is  more  important  than  the 
consumer.     I  have  great  hopes  that  the  experience 
of  the  last  couple  of  years  will  have  enabled  us  to 
form  an  entirely  different  conception  of  the  respec- 
tive positions  of  the  producer  and  the  consumer. 
In  the  supposed  interest  of  the  consumer,  we  have 
as  a  nation  done  everything  that  was  possible  to 
discourage,    thwart,    hamper,    and,    indeed,    abuse 
the  producer.     I  suggest  that  there  is  a  subject 
here  which  might   be   re-stated  with   advantage, 
and  it  might  be  possible  to  show  that  the  true  line 
of  economy,  the  line  of  the  greatest  good,  and  the 
line  of  real  cheapness,  is  along  the  road  of  en- 


'7. 

I 

I 


GETTING  RID  OF  SHIBBOLETHS       77 

couragement  for  the    producer  and  comparative 
disregard  of  the  consumer. 

The  attitude  of  the  past  has  been  an  attitude  of 
antagonism  to  every  form  of  trade  association  or 
any  attempt  on  the  part  of  manufacturers  to  com- 
bine or  co-operate,  while  nothing  but  blessings  have 
been  poured  upon  .the  head  of  everything  in  the 
nature  of  an  association  of  consumers,  co-operative 
societies,  and  the  Uke. 

Then  there  is  the  question  of  the  State's  interest 
in  industry.  The  professors  who  have  provided  us 
with  the  literature  of  economics  pay  all  too  little 
attention  to  this  side  of  the  subject.  The  distri- 
bution of  wealth  has  filled  columns  :  the  creation 
of  wealth  inches. 

It  seems  to  be  nobody's  business  to  inquire  why 
typewriters  should  all  be  made  in  America,  or  (until 
the  war)  optical  glass  in  Germany.  Our  industries 
have  come  to  us  by  accident,  not  as  a  result  of  any 
effort  on  the  part  of  the  State.  A  local  authority 
is  set  up  to  see  that  the  infant  mortality  rate  of 
Guildford  is  kept  low,  but  no  authority  exists  to 
regulate  the  death-rate  in  the  fancy  leather  trade. 
The  public  police  force  sees  to  it  that  we  do  not 
steal  each  other's  watches,  but  if  the  Japanese 
steal  our  best-known  trade  marks  and  thus  filch 
our  Indian  customers,  the  nation  takes  no  cognisance 
of  the  matter.  The  nation  insures  the  working  man 
against  influenza  but  does  nothing  to  insure  his 
means  of  livelihood  against  German  Cartels  or 
American  Trusts. 


7S 


THE  TRADE  OF  TO-MORROW 


Official  Trade  Councils  will  provide  the  State  with 
the  means  to  guard  and  secure  the  national  interest 
in  industrial  prosperity. 

To  recapitulate  these  five  points.  First,  we  have 
to  start  thinking  in  terms  and  quantities  which  are 
entirely  new.  Second,  the  problem  is  not  only  a 
question  of  work  and  wages  but  of  our  national 
existence ;  not  only  the  distribution,  but  the  crea- 
tion, of  wealth.  Third,  we  have  to  recognise  that 
of  equal  importance  to  supplying  the  demand  is 
the  work  of  making  the  demand.  Fourth,  the 
relative  national  values  of  consumer  and  producer 
may  require  to  be  reconsidered.  Lastly,  there  is  a 
State  interest  in  trade  which  has  not  hitherto  been 
recognised. 


CHAPTER  Vni. 
THE  OUTCRY  FOR  ORGANISATION. 

Within  the  last  few  years  there  has  arisen  from  every 
quarter  a  demand  for  organisation.  Many  years 
ago  John  Stuart  Mill  said  : — 

"  The  peculiar  characteristic  of  civilised  beings  is  the 
capacity  of  co-operation  ;  and  this  tends  to  improve  by 
practice  and  becomes  capable  of  assuming  a  constantly 
wider  sphere  of  action." 

The  subject  was  made  fashionable  in  August  last, 
by  Mr.  Asquith,  who,  speaking  in  the  House  of 
Commons,  laid  particular  emphasis  on  the  develop- 
ment of  trade  associations  for  common  action  at 
home  and  abroad  and  for  raising  the  average 
standard  of  production. 

X 

"  The  speculation  of  the  time,"  says  Professor  MacGregor, 
"  is  round  the  problem  how  far  or  how  much  farther  the 
method  of  industrial  grouping  and  the  aspirations  of 
associated  Hfe  can  be  carried.  While  at  the  beginning 
of  the  century  the  problem  was  to  find  a  hearing  for  the 

79 


So 


THE  TRADE  OF  TO-MORROW 


advocates  of  combination,  at  the  end  of  it  the  problem 
of  legislators  and  teachers  is  to  guide  the  movement. 

"  Since  it  is  evident  that  many  of  these  defects  of  in- 
dustrial competition  are  due  to  separateness  of  organisa- 
tion and  policy,  it  is  a  matter  of  course  that  combination 
or  a  further  degree  of  combination  is  necessary  to  their 
remedy.  .  .  .  Any  common  government  of  tliis  kind  will 
tend  to  prevent  not  only  those  depressions  which  come 
from  over-trading  under  the  influence  of  competition  and 
risk,  but  also  those  forms  of  panic  that  are  due  rather  to 
the  fear  of  bad  market  conditions  than  to  actual  conditions."* 

The  authors  of  "  The  Elements  of  Recon- 
struction "  say : — 

"  The  ruling  idea  to  adopt  in  our  national  policy, 
the  idea  about  which  the  rest  of  our  policy  can  be 
built  as  a  body  is  built  upon  a  backbone,  is  the  idea  of 
national  syndication,  the  idea  of  grouping  and  amalga- 
mating our  industries,  our  food  supply,  and  our  labour 
organisation,  upon  a  national  scale.  Only  upon  those 
lines  can  we  hope  to  make  our  industries  scientific  and 
progressive,  defeat  foreign  competition,  secure  a  satis- 
factory home  food  supply,  and  come  to  an  understanding 
and  keep  the  peace  with  labour.  The  alternative  to  such 
a  reconstruction  boldly  and  openly  planned  and  carried 
through,  is  decadence  and  Imperial  disintegration.  .   .   . 

"  Our  view  is  that  these  great  economic  syndications 
upon  a  national  scale,  which  is  the  only  possible  means 
of  saving  and  developing  the  British  Empire  against  the 
dangers  and  competition  which  threaten  it,  must  be  settled 
and  can  only  be  settled  with  the  understanding,  participa- 


1  <( 


The  Evolution  of  Industry." 


THE  OUTCRY  FOR  ORGANISATION      8i 

tion  and  consent  of  both  labour  on  the  one  hand,  and  the 
existing  proprietors,  directors,  and  managers  concerned 
in  these  economic  systems  on  the  other.  It  is  absurd  to 
suppose  any  sudden  and  violent  change  of  system  in  these 
things;  the  arrangements  of  yesterday  are  the  only 
possible  material  we  have  for  the  arrangements  of  to- 
morrow. We  want  to  see  labour  inspired  and  stimulated 
by  our  new  sense  of  common  needs,  in  conference  with 
capital,  quickened  by  a  sense  of  extreme  national  danger, 
upon  these  great  constructive  projects." 

Lord  Milner,  in  an  Introduction  to  these  letters, 
says  : — 

"  We  seem  to  be  more  than  ever  in  need  of  a  synthesis, 
of  some  unifying  principle,  else  we  may  easily  find  our^ 
selves  pursuing  a  number  of  ends  which,  though  perhaps 
individuaUy  commendable,  are  incompatible  with  one 
another.  .  .  .  From  the  heart  of  the  business  worid 
Itself  come  the  most  urgent  warnings  against  excessive 
unregulated  competition  and  the  loudest  appeals  for 
organisation  on  co-operative  hnes  and  for  the  helping 
hand  of  the  State." 

Mr.  Harold  Cox,  in  an  address  to  the  Institute  of 
Civil  Engineers,  declares  : — 

"  Just  as  we  cannot  afford  to  leave  to  individual  enter- 
prise the  defence  of  our  country  against  war.  so  we  cannot 
trust  to  individual  enterprise  alone  to  solve  the  industrial 
problems  that  will  follow  the  establishment  of  peace. 
There  must  be  some  kind  of  collective  effort  to  deal  with 
problems  of  such  magnitude  as  these  will  prove  themselves 
to  be." 


82 


THE  TRADE  OF  TO-MORROW 


Sir  William  McCormick,  in  his  Report  upon  the 
work  of  the  Advisory  Council,  says  :— 

"  We  wish  to  point  out  that  there  are  specially  strong 
reasons  for  more  co-operation  between  the  various  British 
firms  in  each  industry  and  between  the  industries  and  the 
State  in  the  furtherance  of  research.  .  .  .     Organisation 
can  only  be  fought  by  counter  organisation,  and  so  long 
as  the  Englishman  treats  his  business  house  as  his  business 
castle,  adding  to  its  original  plan  here  and  there  as  necessity 
or  inclination  directs,  with  his  hand  against  the  hand  of 
every  other  baron  in  his  trade,  and  no  personal  interest 
in  the  foreign  politics  of  his  industry  as  a  whole,  it  will  be 
as  impossible  for  the  State  to  save  him.  whether  by  research 
or  other  means,  as  it  would  have  been  for  King  Stephen 
to  conduct  a  campaign  abroad.     In  the  main  the  State 
can  only  effectively  help  those  who  help  themselves. 

"  We  think  it  possible  that  the  voluntary  efforts  of 
manufacturers  in  friendly  union  which  enabled  the  problem 
of  munitions  to  be  rapidly  solved,  may  lead  to  a  new  kind 
of  reciprocity  between  firms  which  will  avoid  the  evils 
both  of  monopoly  and  of  individuaUsm.  ...  The  forces 
which  are  at  work  in  this  direction  have  elsewhere  found 
their  expression  in  connection  with  the  Trust  and  the 
Combine,  but  we  believe  if  the  real  nature  of  these  forces 
is  clearly  grasped  that  it  will  be  possible  to  organise  them 
for  the  benefit  not  only  of  the  industries  but  of  the  nation 
as  a  whole." 


One  could  multiply  indefinitely  quotations  of 
this  kind,  but  the  following  short  selection  will 
suffice  to  show  how  the  same  idea  is  running  through 
many  brains— brains  which,  it  will  be  noted  from 


THE  OUTCRY  FOR  ORGANISATION       S3 

the  names  given,  do  not  always  or  often  think  in 
the  same  direction. 

The  late  Lord  Mayor  (Sir  Charles  Wakefield), 
at  a  Meeting  of  the  Engineering  Industry  at  the 
Mansion  House  on  September  20th,  1916  : — 

"  How  to  make  the  most  effective  economic  use  of  this 
great  group  of  industries,  capable  of  affording  well-paid 
employment  for  two  million  workers,  is  not  merely  a 
question  for  company  directors  and  trade  union  officials ; 
it  is  a  national  and  an  Imperial  duty  and  responsibiUty." 

Dr.  William  Garnett,  in  an  article  on  British 
Trade  and  Applied  Science  in  the  Daily  Telegraph, 
on  January  19th,  1916  : — 

"  What  machinery  have  we  for  the  organisation  of 
British  Industry  capable  of  dealing  with  all  the  separate 
trades,  and  especially  with  those  problems  wherein  two 
or  more  trades  have  a  common  interest,  or  would  have 
if  they  realised  their  true  relationship  ?  .  .  .  Cannot 
such  an  organisation  be  created  by  British  Industries  in 
the  interest  of  British  Industry  ?  " 

Sir  Joseph  Compton-Rickett,  in  the  Contemporary 
Review,  May,  1916  : — 

"  Hitherto  our  national  trade  has  been  left  to  the  enter- 
prise of  individuals.  They  have  not  had  the  means  at 
their  disposal  for  determining  over-production  or  under- 
production. ...  It  is  only  the  Govemmwit  of  a  country 
which  can  efficiently  survey  the  entire  field  of  operation, 
and  so  co-ordinate  the  efforts  of  the  commercial  world." 


84 


THE  TRADE  OF  TO-MORROW 


Mr.  W.  N.  Hughes,  Prime  Minister  of  Australia  :— 

"  Let  us,  resolutely  putting  aside  all  considerations  of 
party,  class,  and  doctrine,  without  delay  proceed  to  devise 
a  policy  for  the  British  Empire,  a  policy  which  shall  cover 
every  phase  of  our  national,  economic,  and  social  life ; 
which  shall  develop  the  tremendous  resources  and  yet 
be  compatible  with  those  ideals  of  liberty  and  justice  for 
which  the  men  of  our  race  now,  in  this,  the  greatest  of  all 
wars,  are  fighting  and  dying  in  a  fashion  worthy  of  their 
breeding." 

Sir  Algernon  Firth.  President  of  the  Association 
of  Chambers  of  Commerce,  in  The  Times  Trade 
Supplement,"  April,  1916  : — 

"  We  have  had  no  constructive  Imperial  poHcy  with 
regard  to  trade  and  commerce,  nor  any  organised  attempt 
to  develop  our  trade  and  protect  industries  of  vital  im- 
portance to  the  country.  .  .  .  What  we  have  now  to 
do  is  to  exert  ourselves  in  an  ordered,  practical,  and  deter- 
mined manner  in  order  to  maintain  that  leading  position 
in  the  commerce  of  the  world  which  we  have  held  for 
so  long,  and  which  is  vital  to  our  continued  extension  as 
an  Empire." 


Mr.  Steel-Maitland,'  M.P.,  Under-Secretary  for 
the  Colonies,  in  an  Inaugural  Address  at  the  Glasgow 
School  of  Social  Study  and  Training,  October  13th, 
1916  : — 

"  The  responsibiUty  for  the  solution  hes  upon  all  the 
people,  because  the  task  after  the  war  is  to  try  to  organise 


THE  OUTCRY  FOR  ORGANISATION       85 

our  relations  internally,  inter-imperially,  and  internationally, 
as  a  democracy,  with  the  same  science  and  skill  as  hitherto 
have  been  given  to  an  autocracy.  To  do  this  above  all 
we  need  knowledge,  and  with  knowledge  we  must  combine 
enthusiasm." 


Sir  Leo  Chiozza  Money,  M.P.,  in  the  Evening 
Standard,  July  24th,  1916  : — 

"  The  value  of  association  in  industry  has  been  recognised 
in  nearly  every  branch  by  the  formation  of  Federations 
of  Manufacturers.  It  would  be  a  practicable  and  sensible 
step  to  give  official  recognition  to  all  responsible  trade 
organisations.  .  .  .  The  war  has  proved  how  helpful 
State  organisations  can  be  even  to  the  most  enterprising 
private  adventurers.  It  would  have  been  absolutely 
impossible  to  have  attained  to  the  remarkable  output  of 
munitions  which  is  now  actually  taking  place  if  the  matter 
had  been  left  to  competitive  enterprise." 


Mr.  H.  Wilson  Fox  in  The  Times,  September 
28th,  1916  :— 

"  Can  it  be  right  to  continue  to  pursue  a  purely  passive 
State  poUcy,  and  to  allow  all  our  national  resources  to  be 
dealt  ^\^th  by  individuals  in  a  haphazard  and  uncoordinated 
manner  without  regard  to  State  needs  and  State  oppor- 
tunities ?  It  certainly  cannot  be  right  to  assume  that 
what  is  must  be,  and  that  directions  in  which  State 
capital  and  management  can  be  employed  directly  with 
advantage  for  the  production  of  wealth  cannot  be 
found." 


86 


THE  TRADE  OF  TO-MORROW 


THE  OUTCRY  FOR  ORGANISATION       87 


h.  'F 


Sir  George  E.  Foster,  Minister  of  Trade  and 
Commerce,  Canada,  in  the  Canadian  Gazette,  August 
3rd,  1916  :— 

"  We  must  in  all  ways  fit  ourselves  in  this  Empire  to 
meet  rivals  from  whatever  quarter  they  come — be  as 
intelligent,  skilful,  resourceful,  ready  in  organisation  and 
as  fully  mobihsed  as  they  can  be,  and,  if  possible,  more 
so.  .  .  .  After  peace  comes,  there  will  be  all  the  greater 
necessity  for  getting  together,  working  together,  thinking 
together,  with  one  common  ideal  and  one  common  pur- 
pose." 

Professor  A.  W.  Kirkaldy,  in  a  Presidential 
Address  to  the  Economic  Science  and  Statistics 
Section  of  the  British  Association  : — 

"  As  the  war  developed  there  has  been  a  growing  tendency 
to  demand  organisation  in  every  sphere  of  national  life. 
...  Business,  hke  everything  else,  is  subject  to  evolu- 
tion, and  evolution  on  healthy  lines  can  only  be  obtained 
by  grasping  fundamental  facts  and  applying  experience 
in  accordance  with  economic  laws.  There  need  be  nothing 
revolutionary  about  the  required  changes  in  our  business 
organisation,  ^^e  merely  have  to  note  what  has  already 
occurred,  mark  healthy  tendencies,  and  clear  away  or 
prevent  obstructions  to  natural  growth." 

Professor  J.  A.  Fleming,  in  an  Address  to  the 
Society  of  Engineers,  on  May  ist,  1916  : — 

"  No  one  who  has  studied  even  casually,  the  German 
methods  can  fail  to  admit  they  have  realised  fully  in  com- 
mercial matters  that  union  is  strength.  .  .  .     Our  ideal 


has  been  largely  individualism  and  competition,  theirs 
has  been  organisation  and  co-operation.  .  .  .  The  first 
condition  of  success  must  be  association  and  combination, 
and  the  second  the  scientific  method  in  all  things." 

Mr.  George  H.  Roberts,  M.P.,  in  the  Evening 
Standard,  October  20th,  1916  : — 

"  It  is  encouraging  to  observe  the  many  signs  of  awaken- 
ing to  the  fact  that  our  industrial  system  was  deficient  in 
many  respects.  .  .  .  Employers  are  realising  the  necessity 
to  utilise  in  larger  degree  the  discoveries  of  science,  together 
with  greater  initiative  and  better  organisation  of  pro- 
cesses. .  .  .  British  brain,  skill,  and  ingenuity  have 
proved  equal  to  the  world's  greatest  emergency.  British 
labour  also  is  capable  of  as  high  efficiency  as  the  world 
contains.  With  cordial  co-operation  national  productive- 
ness can  be  almost  indefinitely  expanded." 

Dr.  Dugald  Clerk,  Chairman  of  the  Council  of 
the  Royal  Society  of  Arts  : — 

"  It  is  necessary  that  we  should  as  a  nation,  recognise 
more  fully  the  importance  of  co-operation  and  coordina- 
tion in  both  abstract  and  applied  science.  We  are  intense 
individuaUsts  and  our  great  success  in  the  world  is  largely 
due  to  that  quality ;  it  has,  however,  its  drawbacks,  and 
we  have  arrived  at  a  stage  of  development  in  both  science 
and  industry  where  united  effort  would  aid  us  rapidly  to 
improve  our  scientific  and  industrial  position." 

Mr.  Sidney  Webb,  in  the  New  Statesman, 
April  28th,   1917  : — 

"  A  survey  of  the  whole  field  makes  it  clear  that  there 
is  a  very  real,  and,  as  we  venture  to  think,  an  ever-widening 


88 


THE  TRADE  OF  TO-MORROW 


I* 


sphere  for  the  Professional  Organisation  of  brain-workers 
in  the  Control  of  Industries  and  Services  in  the  modern 
State,  although  not  exactly  the  sphere  to  which  its  most 
enthusiastic  adherents  have  aspired." 

Professor  Ripper,  Vice-Chancellor  of  the  Univer- 
sity of  Sheffield,  at  the  Royal  Society  of  Arts 
on  May  9th,  1917,  spoke  of 

"  The  national  organisation  of  our  industries,  each  in- 
dustry  being  represented  by  its  own  organisation  and 
association,  and  the  whole  centreing  round  a  Government 
Department  of  Industry  and  Commerce." 

Such  a  weighty  mass  of  opinion  calls  for  more 
consideration  on  the  part  of  the  Government  than 
the  subject  has  so  far  received.  These  and  many 
other  similar  utterances  have  caused  industrial 
interests  to  come  together  to  an  extent  never  reached 
before,  and  the  movement  now  cries  aloud  for 
Government  recognition  and  regulation. 


CHAPTER  IX. 

DIFFERENT  SCHEMES. 

There  are  at  present  before  the  pubHc  dozens  of 
well-thought-out  suggestions  for  the  organisation 
of  trade. 

That  which  has  received  most  attention  in  the 
Press  is  probably  Mr.  Sidney  Webb's  "  How  to  Pay 
for  the  War."  Mr.  Webb  has,  so  far,  confined  his 
attention  to  the  railways,  the  Post  Office,  the  coal 
supply,  and  one  or  two  other  great  national  services, 
and  apart  from  an  obvious  and  probably  intentional 
failure  to  grasp  the  problems  of  profit  and  loss,  his 
schemes  are  full  of  interest.  But  they  hardly  touch 
what  I  submit  is  the  far  larger  question  of  the 
organisation  of  trade.  Mr.  Webb,  like  so  many 
great  thinkers  on  these  matters,  appears  to  forget 
that  the  railway  which  carries  the  goods  is  a 
comparatively  small  part  of  the  problem  of  pro- 
ducing and  selling. 

Next,  perhaps,  in  importance  as  a  contribution  to 
the  subject  are  the  letters  on  "  The  Elements  of 
Reconstruction,"  to  which  I  have  already  referred. 
These  letters  are  chiefly  useful  for  their  masterly 

89 


II 


90  THE  TRADE  OF  TO-MORROW 

criticism  of  existing  institutions.  When  the  authors 
proceed  to  demoHsh  the  Houses  of  Parhament  and 
reconstruct  a  system  of  representation  by  trades 
instead  of  by  districts,  they  appear  to  me  to  get  out 
of  the  range  of  the  practical. 

The  exhaustive  Report  of  the  Garton  Foundation 
is  full  of  suggestions  which  require  to  be  studied. 
The  authors  of  this  document,  after  a  full  inquiry 
into  most  of  the  problems  connected  with  social 
unrest,  come  to  conclusions  which  are  very  similar 
to  those  which  are  here  submitted,  and  set  up 
industrial  councils  for  the  control  of  industry  com- 
posed of  masters  and  workmen. 

"  The  field  of  action  open  to  these  Councils  would 
be  very  great.     It  would  extend,  for  instance,  to  :-- 


(a)  The    suggestion    and    consideration    of 
improved  methods  and  organisation. 

(b)  The    maintenance    of    works    disciphne 

and  output. 

(c)  The  maintenance  of  a  high  standard  of 

design  and  workmanship. 

(d)  The  education  and  training  of  apprentices, 

and  the  conditions  of  entry  into  the 
industry  concerned. 

(e)  The  demarcation  of  tasks. 

(/)  The  prevention  of  unemployment,  the 
development  of  security  of  tenure  in 
the  trade,  and  the  decasualisation  of 
labour. 

is)  Questions  of  wages  and  piece  rates. 


DIFFERENT  SCHEMES 


91 


(( 


i( 


"  (h)  The  prosecution  of  research  and  experi- 
ment, and, 

"  (i)  The  improving  of  the  public  status  of  the 
industry." 

Mr.  H.  E.  Morgan,  in  a  book  entitled  "  The  Muni- 
tions of  Peace,"  has  elaborated  a  scheme,  which  is 
at  least  quite  practical,  for  the  establishment  of  a 
National  Trade  Agency.  This  body,  which  would 
have  a  constitution  very  similar  to  the  Port  of 
London  Authority  and  other  semi-Governmental 
institutions,  would  take  charge  of  the  work  of  sell- 
ing the  product  of  British  industries  abroad,  would 
supersede  the  present  Consular  Service,  and  organise 
our  foreign  trade  for  us.  Mr.  Morgan's  scheme  has 
the  weakness  which  is  common  to  so  many  of  these 
proposals  and  so  many  present-day  movements, 
that  it  attempts  to  deal  with  all  trades  and  ignores 
the  fundamental  principle  that  the  only  way  to  deal 
successfully  with  trading  problems  is  trade  by  trade, 
one  trade  at  a  time. 

Then  there  is  the  movement  known  as  Guild 
Socialism,  and  a  whole  series  of  books  among  which 
that  by  Farrow  and  Crotch  on  "  The  Coming  Trade 
War  "  demands  attention.  These  authors  lay  them- 
selves open  to  the  criticism  that  they  devote  too  little 
attention  to  the  improvement  and  organisation  of 
our  internal  arrangements  and  too  much  to  the  ques- 
tion of  tariffs  and  protection  against  foreign  compe- 
tition. 

Mr.  Wilfred  Stokes,  President  of  the  British  Engi- 


92  THE  TRADE  OF  TO-MORROW 

neering  Association,  in  a  pamphlet  which  bears  the 
same  title  as  Mr.  Sidney  Webb's  book,  although  it 
was  published  long  before  the  latter,  sets  out  the 
case  for  a  Board  of  Industry.     He  would  have  a 
permanent  President,  some  man  of  great  business 
abihty.  with  the  rank  of  a  Cabinet  Minister,  assisted 
by  fifteen  leading  men  of  business  as  a  Council 
representing  the  industries  of  agriculture,  banking' 
bmlding  materials,  chemicals,  cutlery,  electricity' 
engineering,  foodstuffs,  hardware,  iron    and  steel 
leather,  paper,  railways,  shipping,  and  textiles.     To 
this  Council  he  would  add  one  representative  each 
for  our  Overseas  Dominions.     There  would  be  a 
Parliamentary  Secretary,  a  Permanent  Staff  with 
attractive  salaries,  and  a  large  staff  of  Trade  Com- 
missioners and  Trade  Correspondents  in  each  ol  the 
Dominions,  Colonies,  and  foreign  countries. 

vSir  Leo  Money,  in  discussing  the  need  for  a  Minister 
of  Commerce  in  the  Evening  News  of  July  24th. 
1916,  said  :— "  How  is  a  practical   means  to    be 
devised  for  such  a  Ministry  to  keep  in  practical 
touch  with  our  industries  ?     A  means  Ues  ready  to 
our  hand.     The  value  of  association  in  industry 
has  been  recognised  in  nearly  every  branch  by  the 
formation    of    federations    of    manufacturers.     It 
would  be  a  practicable  and  sensible  step  to  give 
official  recognition  to  all  responsible  trade  organisa- 
tions, and  for  the  Ministry  of  Commerce  to  have 
statutory  powers  of  representation  upon  their  execu- 
tive committees.    There  is  no  reason  why  we  should 
not  go  further  and  see  to  it  that  every  firm  engaged 


DIFFERENT  SCHEMES 


93 


in  an    industry  becomes  a  member  of    the  trade 
federation." 

But  by  far  the  most  important  of  all  these  sug- 
'  gestions  is  that  which  is  made  by  the  Committee  of 
the  British  Association  which  dealt  with  the  subject 
of  indus'trial  unrest,  and  which  reported  to  the  1916 
meeting  through  its  chairman,  Professor  A.  W. 
Kirkaldy.  For  the  improvement  of  existing 
industrial  organisation  they  suggest  that  : — 

"  Employers  should  be  organised  into — 

"  (a)  Associations   of   one   trade   in   a   given 

district. 
"  (b)  National  Association  of  one  trade. 
"  (c)  Local  Federations  of  trades. 
"  {d)  National  Federations  of  trades. 
"  Of  these  [h)  and  (d)  would  be  organised  under 
a  system  of  representation. 

"  Workpeople  should  have  unions  and  federa- 
tions corresponding  to  those  of  the  employers,  and 
in  both  cases  the  National  Federations  should  be 
carefully  organised  councils  enjoying  a  large  measure 
of  authority,  tempered  by  the  necessity  to  win  and 
preserve  the  confidence  of  their  electors. 

"  From  these  two  representative  bodies  there 
could  be  elected  an  Industrial  Council  as  a  Court 
of  Appeal,  representative  of  the  whole  industrial 
activity  of  the  country.  So  far  as  these  various 
bodies  were  approved  by  the  State  they  would 
enjoy  far-reaching  powers. 
"  Approval  by  the  State  should  depend  on  the 


94  THE  TRADE  OF  TO-MORROW 

observance  of  moderation  and  the  working  in 
conformity  with  carefully  devised  regulations.  For 
the  State  in  this  matter  would  be  the  representa- 
tive of  the  consumer  and  of  the  national  interest. 
Under  this  system,  workpeople  would  enjoy  all 
the  advantages  aimed  at  by  the  extreme  party 
such  as  the  syndicalist,  but  the  dangers  and  risks 
inseparable  from  a  revohitionary  policy  would 
be  avoided." 

The   Builders'    National    Industrial    Parliament, 
referred  to  elsewhere,  is  a  scheme  which  has  actually 
materialised.     This  body  brings  labour  and  capital 
together  for  the  general   discussion   of  questions 
affecting  the  welfare  of  the  industry,  and  sets  an 
example  which  might  well  be  followed  in  every 
industry.     Mr.  Malcolm  Sparkes  has,  undoubtedly, 
attained  as  near  to  the  ideal  as  is  possible  on  the 
voluntary  principle.     It  remains  to  be  seen  whether 
the  Builders'  Pariiament,  or  similar  bodies  in  other 
mdustries,    will   be   able   to   exercise   a   sufficient 
influence  over  their  respective  constituencies  while 
they  lack  authority  and  a  perfect  representative 
basis. 

Putting  all  these  schemes  together,  one  arrives 
very  easily  at  the  conclusion  that  the  theories 
underlying  the  ideal  solution  of  the  industrial 
problem  are,  first,  the  adoption  by  the  State  of  a 
direct  interest  in  the  industries  of  the  country, 
and,  second,  the  introduction  of  the  representa- 
tive principle  into  trade ;  and  we  begin  to  see  the 


DIFFERENT  SCHEMES 


95 


true  functions  of  the  Government  in  the  matter. 
If  Governments  would  only  give  up  the  habit  of 
dabbling  in  actual  trading  and  would  confine  their 
activities  within  a  proper  sphere  and  make  a  study 
of  some  of  these  suggestions,  they  would,  I  think, 
come  to  the  conclusion  that  their  duty  is  to  set  up 
in  each  industry  a  representative  authority,  charged 
with  the  work  of  promoting  the  prosperity  of  that 
industry  for  the  benefit  of  the  nation. 

"  Many  voices  are  crying  for  large  and  showy 
schemes,"  says  The  Times,  in  a  leading  article  on 
August  5th,  1916.  But  "  a  live  system  must  grow 
from  within  and  must  have  life  at  the  heart.  The 
trade  organisations  that  are  spontaneously  forming 
now  point  the  right  way.  They  are  at  the  heart, 
and  they  show  that  it  is  alive  and  vigorous.  A 
real  working  system  will  grow  out  of  them  with  the 
co-operation  of  other  factors." 

All  experience  shows  that  the  way  of  progress 
is  the  road  of  combination  and  co-operation.  The 
only  question  is  the  particular  sort  of  combination 
which  we  shall  adopt.  We  can  copy  America,  we 
can  copy  Germany,  and  begin  a  couple  of  genera- 
tions behind  to  compete  with  them  in  their  own 
way.  Or  we  can  profit  by  their  experience,  coupled 
with  our  own,  and  devise  a  new  system  of  joint 
endeavour  on  the  part  of  the  individual  and  the 
State,  which  is  better  than  anything  that  has  been 
attempted  in  the  past. 

In  considering  the  schemes  for  the  reconstruc- 
tion of  industry  it  must  not  be  assumed  that  sim- 


m 


n 


96  THE  TRADE  OF  TO-MORROW 

plicity  is  necessarily  a  recommendation.  Progress 
m  trade  involves  a  continually  increasing  complexity. 
Success  will  only  be  achieved  by  continual  pro- 
cesses of  division,  separation,  and  specialisation, 
and  the  highest  forms  of  industrial  development 
will  only  be  reached  when  every  productive 
operation  has  arrived  at  the  limit  of  division  and 
dilution. 

The  history  of  trade  is  the  history  of  organisa- 
tion—organisation which  started  in  a  very  small 
way,  which  progressed  very  slowly,  and  which  has 
gradually  become  more  complicated  and  its  develop- 
ment more  rapid.  Adam  was  his  own  farmer, 
tailor,  baker,  builder,  and  banker.  Organisation 
has  gradually  raised  this  standard,  and  is  perform- 
mg  what  at  first  sight  appears  a  miracle.  It  pro- 
vides us  all  with  clothes,  food,  houses,  and  other 
necessities,  in  quantities  far  in  excess  of  what  we 
could  ourselves  provide  for  ourselves  if  we  devoted 
the  whole  of  our  lives  to  that  sole  ot)ject. 

As  civihsation  progresses,  the  standard  of  comfort 
is  raised,  and  every  generation  demands  more 
goods.  This  demand  is  a  progressive  demand 
The  mere  growth  of  population  makes  necessary 
devices  and  resources  for  a  gross  increase  in  the 
volume  of  goods  made,  while  the  raising  of  the 
standard  of  comfort  intensifies  the  need. 

The  organisation  of  industry  is  the  reply  to  this 
problem.  The  present-day  workman  works  less 
hard  than  did  his  predecessor,  while,  at  the  same 
time,  he  consumes  far  more  goods.    The  problem 


DIFFERENT  SCHEMES 


97 


of  the  future  is  not  to  make  everybody  work  harder, 
but  so  to  arrange  their  efforts  that  the  production 
shall  be  greater. 

A  favourite  line  of  argument  with  a  certain  type 
of  reformer  is  to  point  to  the  wastefulness  of  a  system 
which  demands  the  middleman,  the  speculator, 
the  broker,  the  agent,  and  numerous  other  inter- 
mediaries. We  are  all  familiar  with  the  type  of 
Socialist  who  would  cut  out  everybody  but  an  all- 
providing  State  and  the  consumer. 

But  the  fallacy  of  this  line  of  argument  is  exposed 
if  you  will  admit  the  proposition  I  have  just  laid 
down,  that  the  present-day  workman  works  less 
hard  than  his  predecessor  and  consumes  more  goods. 
The  natural  course  of  trade  will  be  to  multiply 
intermediaries.  As  organisation  and  science  are 
better  imderstood  and  practised  there  will  be  more 
middlemen,  more  thinkers,  more  inventors,  more 
designers,  more  speculators,  and  more  managers 
than  ever. 

A  system  which  aims  at  the  elimination  of  all 
these  intermediaries  is  a  backward  movement  and 
not  a  forward  movement.  As  trade  becomes  more 
and  more  complicated,  more  and  more  divided,  as 
new  industries  arise,  as  old  industries  are  spUt  into 
parts,  the  little  man  who  does  nothing  but  keep  his 
office  and  think  will  become  more  and  more  of  a 
national  necessity.  This  little  man,  who  has  the 
chance  of  a  fortune  and  the  fear  of  bankruptcy 
always  in  front  of  him,  is  an  enormous  asset.  He  is 
responsible  for  most  of  the  progress  the  world  has 

G 


98 


THE  TRADE  OF  TO-MORROW 


made  in  the  past,  and  any  system  which  aims  at 
his  ehmination  is,  I  submit,  a  bad  system. 

The  problem  is  to  organise  all  these  people,  to 
make  the  greatest  possible  national  use  of  them,  to 
encourage  and  help  those  processes  of  development 
in  which  they  are  engaged. 


IE 


CHAPTER   X. 


LABOUR. 


Successful  organisation  of  industry  is  out  of  the 
question  imless  the  co-operation  of  labour  can  be 
secured.  Satisfactory  working  arrangements  with 
labour  can  never  be  made  until  bodies  representing 
capital  and  management  of  equal  standing  with  the 
trade  imions  have  been  brought  into  existence. 
The  estabhshment  of  thoroughly  representative 
trade  associations  and  unions  wo\:dd  make  possible 
the  creation  in  each  industry  of  governing  or  con- 
trolling bodies  composed  half  of  masters  and  half 
of  men,  Trade  Councils,  which  would  be  responsible 
to  the  Government  for  the  welfare  of  each  trade. 

The  demands  of  labour  are  generally  erroneously 
expressed  as  demands  for  money — wages. 

Finance  has  for  too  long  been  supreme  in  the 
commercial  world.  The  so-called  money  market 
occupies  a  position  far  too  important.  It  is  in  effect 
nothing  more  than  the  counting-house  of  industry. 
It  is  composed  of  a  lot  of  superior  book-keepers  who 
enter  up  milhons  on  both  sides  of  the  ledger  and  call 
it  money.     Ninety  per  cent,  of  this  money  does  not 

99 


I 


i 


100        THE  TRADE  OF  TO-MORROW 

exist  at  all.  Money  has  been  aptly  described  as  a 
foot-rule  for  measuring  goods  and  services.  The 
workman  gets  an  exaggerated  idea  of  the  importance 
of  money  because  in  his  case  the  bulk  of  his  turnover 
actually  passes  through  his  fingers  in  the  shape  of 
coinage.  But  the  demand  of  labour  is  not  only 
for  money  :  it  is  first  for  Status,  and  secondly  for 
boots,  beef,  bicycles,  omnibuses,  or  any  other  form 
of  goods  or  services.  These  things  all  necessitate 
production. 

Our  position  during  the  war  makes  the  study  of 
this  problem  somewhat  easier.  There  is  a  limited 
supply  of  every  class  of  goods  and  services  available 
for  consumption.  With  care  we  are  just  able  to 
make  our  supplies  satisfy  our  needs.  If  by  a  stroke 
of  the  pen  everybody's  income  were  at  once  doubled 
in  so-called  money,  it  would  not  make  one  atom  of 
difference  to  the  comfort  or  to  the  real  wealth  of  any 
of  us.  The  only  way  in  which  we  can  help  the 
country  and  help  ourselves  to-day  is  to  produce. 

I  wish  some  way  could  be  found  of  clearing  this 
question  of  money  right  out  of  the  way.  It  is  a 
false  issue.  There  is  authority  for  regarding  it  as 
the  root  of  all  evil :  it  is  certainly  the  root  of  all 
confusion.  In  the  very  earliest  days  business  was 
conducted  by  direct  exchange  of  goods  without  the 
intervention  of  money.  The  next  stage  was  the 
introduction  of  a  means  of  exchange  in  the  shape  of 
metal  talHes.  We  have  now  reached  the  stage  when 
by  means  of  banking  systems  we  have  almost  entirely 
dispensed  with  the  tally,  and  the  whole  thing  is 


LABOUR 


lOI 


done  by  book-keeping  entries.  I  do  not  know 
whether  it  is  possible  that  in  the  future  some  system 
may  be  developed  which  will  enable  us  definitely 
to  dispense  with  those  incumbrances  now  called 
money.  At  all  events,  in  discussing  problems  like 
this,  it  is  of  the  utmost  importance  to  get  the  idea 
of  money  into  its  proper  place  in  relation  to  the 
whole. 

The  great  brains  that  are  directing  the  Labour 
Movement  understand  this  point,  and  some  inter- 
esting changes  are  noticeable.  The  claim  of  labour 
used  to  be  for  money.  It  then  became  a  demand  for 
a  bigger  share  in  the  proceeds  of  industry,  and 
latterly  a  more  advanced  plea  is  put  forward  for  a 
share  in  the  control  of  industry. 

Mr.  Harry  GosUng,  in  his  Presidential  Address 
to  the  Trades  Union  Congress,  used  this  phrase  : — 
"  Would  it  not  be  possible  for  the  employers  of  this 
country  to  agree  to  put  their  businesses  on  a  new 
footing  by  admitting  the  workmen  to  some  partici- 
pation, not  in  profits  but  in  control  ?  "  That  is 
the  very  latest  demand  of  the  highest  authority 
in  the  labour  world. 

The  Report  of  the  Garton  Foundation  recognises 
this  demand  and  calls  it  a  question  of  status  : — 

*'  The  great  obstacle  to  co-operation  is  the  ques- 
tion of  status.  The  ill-will  of  Labour  towards 
Capital  and  Management  is  not  wholly  a  question 
of  their  respective  share  of  earnings.  Friction 
arising    over  the    distribution    of    earnings  is  in 


102        THE  TRADE  OF  TO-MORROW 


LABOUR 


103 


Itself  due  quite  as  much   to  a  sense  of  injustice 
in     the    machinery    of    distribution    as    to    the 
desire     for     actual     increase     of     wages.       The 
fundamental  grievance  of  Labour  is  that  while  all 
three  are  necessary  parties  to  production,  the  actual 
conditions  of  industry  have  given  to  Capital  and 
Management  control  not  only  over  the  mechanism 
of  production,  but  also  over  Labour  itself.     They 
feel  that  the  concentration  of  Capital  in  a  compara- 
tively   few    hands  has    rendered    fair    bargaining 
between  the  parties  impossible.  A  man  who  leaves  his 
work  without  reason  inflicts  on  his  employer  a  certain 
amount  of  loss  and  inconvenience.    A  man  who  is 
dismissed  without  reason  may  lose  his  hvehhood. 
While  each  great  firm  represents  in  itself  a  powerful 
organisation,  apart  from  any  Employers'  Associa- 
tion to  which  it  may  belong,  the  men  employed 
by  the  firm  are  solitary  units,  having  no  power 
of  collective  action  without  calhng  in  the  Trade 
Unions  representing  the  whole  of  each  craft.     In  the 
last  resort  the  only  effective  weapon  of  the  Trade 
Union  is  the  strike,  and  the  loss  inflicted  by  a  strike 
or  lock-out  on  the  CapitaHst  Class  is  not  comparable 
with  the  acute  personal  suffering  of  the  workmen 
and  their  families.     They  feel  therefore  that  in  any 
dispute  the  dice  are  weighted  against  them." 

The  war  has  paved  the  way  for  a  better 
understanding,  and  already  the  views  of  both  sides 
are  undergoing  great  modifications. 

"There  has  been,"  says  Professor  Ripper,  "an 


i 


enormous  improvement  in  our  methods  of  working, 
as  well  as  in  the  spirit  of  wilUngness  to  work  together 
and  to  co-operate  and  associate. 

"  There  is,  however,  as  we  all  realise,  the  danger 
that  after  the  war  this  spirit  of  co-operation  will 
not  continue,  and  that  the  subjects  of  dispute 
between  Capital  and  Labour,  when  the  present 
single  aim  has  been  removed,  will  be  so  many  and 
so  numerous  as  to  make  serious  disputes  more  or 
less  inevitable.  If  the  causes  of  the  old  troubles 
remain,  it  is  as  certain  as  that  night  follows  day 
that  the  results  will  also  remain.  The  causes  in 
the  past  which  have  led  to  these  troubles  have  been 
too  often  similar  in  kind  to  those  which  are  respon- 
sible for  the  great  world-war.  Prussian  Militarism 
is  concerned  only  with  conquest,  and  disregards 
absolutely  the  human  price  that  is  paid  to  accom- 
phsh  its  purpose.  So  in  the  past  our  commerce, 
trade,  and  manufacture  have  been  conducted  too 
much  without  regard  to  human  and  neighbourly 
considerations,  and  for  the  one  object  only  of  profit 
on  the  one  hand,  or  wages  on  the  other.  But  both 
these  conditions  contain  within  themselves  the  seeds 
of  their  own  destruction.  There  are  reasons,  how- 
ever, for  believing  that  wiser  counsels  may  be,  on 
the  whole,  expected  to  prevail.  The  lesson  of  the 
need  of  mutual  co-operation  has  been  burnt  into 
our  consciousness  during  this  war  as  never  before, 
and  it  seems  certain  that  employers  and  their  work- 
men who  have  fought  together  as  officers  and  men  at 
the  Front  will  return  to  their  work,  not  to  fight  each 


I04        THE  TRADE  OF  TO-MORROW 

other  in  industrial  disputes,  but  to  co-operate  to 
bring  about  a  solution  of  the  difficulties  which  lie 
ahead  by  joint  and  friendly  discussion. 

"  The  spirit  of  co-operation  is  not  a'mere  senti- 
ment or  theory.  It  has  been  as  much'a  scientific 
necessity  for  the  winning  of  this  war  as  the  provi- 
sion of  guns  and  ammunition,  and  it  will  be  equally 
a  scientific  necessity  to  success  in  the  arts  of  peace." 

The  Builders'  National  Industrial  Pariiament  is 
the  outstanding  practical  experiment  in  these 
matters,  among  its  objects  being  "  to  promote  the 
continuous  and  progressive  improvement  of  the 
industry,  to  realise  its  organic  unity  as  a  great 
national  service,  and  to  advance  the  well-being  and 
status  of  its  personnel." 

If  labour  could  be  made  to  see  that  its  real  need 
is  increased  production,  all  those  wonderful  powers 
which  labour  has  displayed  in  its  fight  against 
capital  would  be  utihsed  in  solving  the  problem  of 
production.  This  idea  is  gaining  ground,  as  is  shown 
by  an  article  by  Mr.  T.  E.  Naylor,  of  the  London 
Society  of  Compositors. 

"I  suggest  to  you,"  says  Mr.  Naylor,  "  that  the 
time  has  come  when  your  organisations  should  cease 
to  be  merely  defensive  and  resistive,  and  should 
begin  to  participate  actively  in  the  development  of 
industry.  Whether  this  conception  is  new  or  not, 
I  do  not  know.  I  do  know  that  it  has  never  been 
tried;  and  I  earnestly  appeal  to  you  to  eive  it  a 
full  trial." 


LABOUR 


105 


If  we  put  the  problems  of  production  in  their 
order  they  are  roughly  as  follows  : — 
(i)  Education. 

(2)  The  apphcation  of  science  to  industry. 

(3)  The  elimination  of  waste. 

(4)  The  disposal  of  the  product. 

(5)  Wages. 

(6)  Profits. 

Now  the  whole  nation  is  interested  in  problems 
(i),  (2),  (3),  and  (4).  Labour  and  capital  are  equally 
dependent  upon  their  successful  solution.  Labour 
and  capital  are  equally  entitled  to  express  an  opinion 
with  regard  to  them,  and  it  is  not  until  they  are 
solved  that  any  question  of  wages  or  profits  can 
arise. 

I  am  aware  that  in  practice  wages  is  the  first 
charge  upon  industry  and  profits  the  last,  but  it 
must  be  recognised  that  the  questions  I  have  men- 
tioned have  to  be  faced  before  either  comes  into 
existence  at  all.  These  questions  have  hitherto 
been  regarded  as  the  sole  province  of  the  manage- 
ment. Neither  the  individual  labourers  nor  the 
Trade  Unions  have  attempted  to  take  any  interest 
in  them.  I  am  not  now  speaking  of  the  management 
of  an  individual  works.  It  is  perfectly  obvious  that 
in  practice  some  one  individual  must  be  supreme 
when  the  question  is  the  actual  working  of  some 
particular  shop.  But  we  are  discussing  not  the  well- 
being  of  particular  shops,  but  the  well-being  of  whole 
industries.  The  troubles  of  labour  arise  very  largely 
from  the  lack  of  abiUty  on  the  part  of  the  small 


1*1 


lip 
i 


io6        THE  TRADE  OF  TO-MORROW 

body  of  masters  who  have  hitherto  had  to  shoulder 
unaided  full  responsibility  for  the  problems  I  have 
indicated.  If  instead  of  agitating  for  so  many 
shJhngs  a  week  without  regard  to  where  these 
shillings  are  coming  from  or  what  they  mean 
labour  would  agitate  for  the  development  of  some 
market  which  has  hitherto  been  neglected,  it  would 
achieve  its  object  more  directly  and  with  more 
certainty. 

My  demand  is  on  behalf  of  the  nation  for  the 
fullest  possible  development  of  each  industry. 
My  argument  is  that  everyone  engaged  in  that 
mdustry  ought  to  have  the  chance  to  take  a  hand 
m  that  development.  My  theory  is  that  this  can 
only  be  done  by  the  introduction  of  the  representa- 
tive principle  into  each  trade,  and  the  setting  up 
of  authonties  for  the  study  and  control  of  the  whole 
trade.  On  these  authorities  labour  should  have 
an  equal  voice  with  capital. 

Two  quotations  will  help  my  argument.  Pro- 
fessor Kirkaldy,  in  the  Report  of  the  Committee 
on  Industrial  Unrest,  says  :— 

"  Some  of  the  workers  are  asking  for  much  more 
than  an  increase  in  wages;  they  are,  in  effect, 
asking  for  a  change  of  status.  They  are  dissatis- 
fied with  the  status  of  the  wage-earner,  and  call 
mto  question  the  actual  relationship  that  exists 
in  industry  to-day  between  the  different  factors 
concerned.  In  fact,  workpeople  are  taking  up  a 
position  which  will  preclude  a  mere  patching  up  of 
quarrels,  or  a  mere  scheme  of  wages  adjustment. 


LABOUR 


I 


107 


What  they  aim  at  is  a  change  in  the  relationship 
between  employers  and  workpeople." 

Professor  MacGregor,  in  '*  The  Evolution  of 
Industry,"  puts  the  same  problem  in  this  way  : — 

"  The  relation  of  employment  and  the  system 
of  competitive  enterprise  imply  the  government 
of  the  great  field  of  national  labour  by  those  who 
are  not  under  the  direct  industrial  control  of  the 
people.  We  have  to  ask  whether  it  is  to  be  the 
settled  form  of  industriaUsm  that  the  policy  by 
which  goods  are  made  and  marketed  is  to  be  shaped 
on  this  non-representative  basis,  and  if  the  great 
mass  of  the  working  producers  are  to  wait  for  the 
call  and  to  follow  the  lead  of  this  kind  of  enter- 
prise." 

It  may  be  of  interest  to  notice  that  the  same 
problem  is  agitating  the  minds  of  the  trading 
community  of  the  United  States,  and  it  is  particu- 
larly interesting  to  note  that  the  European  War 
and  the  opportunity  for  the  development  of  American 
industry  which  it  afforded,  was  used  as  an  argument 
for  further  co-operation  between  capital  and  labour. 
The  Report  of  the  Conference  of  the  National  As- 
sociation of  Manufacturers  of  the  United  States  of 
America  says  : — 

'*  May  we  not  hope  that  both  labour  and  capital 
will  come  to  a  prompt  realisation  of  the  vast  im- 
portance to  their  interests  of  the  unusual  oppor- 
tunity  afforded    to    this    country    of   developing 


1 


'■w 


108 


THE  TRADE  OF  TO-MORROW 


S  cloir  f^P''^'^^"  conditions,  they  will  work 
in  closer  harmony  to  the  same  great  end  ?  " 

thi?L  w"^"   ^°'''''^^''  ^^'^^  '^  ''  the  object  of 
suLrt?  K  '/''"^"'''  "^"  ^^-^  '^  study  many 

arise  with  their  creation  a  poHtics  in  every  trade 
a^pohtics  m  which  labour,  management,  and^c^fai 
will   have  an   equal   interest.     Education   science 
foreign  competition,  costing  systems,  standard 

many  other  subjects,  will  be  debated  week  by  week 
and  month  by  month  at  the  meetings  of  Ich 
luttes  ^'""^'  and  the  numerous  subsidiary  com 

The  opportunity  of  participating  in  these  dis- 
cussions should  do  much  to  remove'that  fee^Lg  of 
nZ.    Y  "^  ''"'"'  "^^^^  ''  ^'  th^  bottom  of  mos 
Tn^e^t  rt-     ^"i'  opportunity  would  be  the 

should  tlv        ?''^-  ^"'^^"^'^  ^'^^^^^  '^^'  ^^bour 
should  take  a  share  in  the  control  of  industry.     A 

ve^  long  acquaintance  with  representative  masters 

hif  ^f  ?h         i^'  ^'''  ''  ^^"^^^  '^^'  "^ore  than 
tJJi    ,      f"^  '^  ^^'''  '^'^^^  Council  debates 
would  be  found  to  come  from  the  labour  bench 
If  It  codd  be  estabhshed  as  a  guiding  principle  that 

thing,  that  wages  and  profits  both  depended  upon 
that  welfare,  ^d  that  the  representatives  of  wages 


LABOUR 


109 


and  profits  were  equally  responsible  for  that  welfare, 
then  the  whole  relations  of  capital  and  labour  would 
be  changed. 

There  is  no  suggestion  here  that  labour  or  capital 
should  either  of  them  sacrifice  their  independence. 
There  is  nothing  in  these  proposals  which  would 
rob  the  Trade  Union  of  the  right  to  organise  a  strike 
or  the  Employers'  Association  of  the  right  to  order 
a  lock-out.  All  that  is  done  is  to  bring  the  two 
parties  into  permanent  consultation  upon  a  statu- 
tory body  charged  with  debating,  not  their  differ- 
ences, but  those  subjects  which  can  be  described 
as  common  ground.  Masters  and  men  to-day 
never  meet  except  to  discuss  the  eternal  questions 
of  wages  and  profits.  They  never  meet  except 
as  representatives  of  opposing  and  conflicting 
forces.  If  it  were  possible  to  bring  them  together 
as  the  joint  trustees  of  the  nation  in  these  other 
matters  that  I  have  indicated,  it  would  surely  be 
found  that  the  differences  between  them  which 
now  occupy  too  much  of  their  attention  would 
be  capable  of  adjustment. 

It  is  of  course  understood  that  in  the  industrial 
development  which  it  is  hoped  to  promote  by 
means  of  these  Councils,  there  must  be  a  higher 
scale  of  wages  than  has  prevailed  in  the  past. 
This  alteration  would,  in  fact,  be  automatic,  be- 
cause in  discussing  the  possibilities  of  an  increase 
of  output,  the  labour  representatives  on  the  Trade 
Council  would  see  to  it  that  the  profits  from  that 
increase  were  properly  apportioned. 


/ 


HO        THE  TRADE  OF  TO-MORROW 

Limitation  of  output,  as  I  have  observed  else- 
where, IS  a  crime  which  must  be  charged  against 
the  masters  as  weU  as  against  the  men,  and  labour 
when  It  gets  a  voice  in  the  control  of  industry  will 
be  careful  to  see  that  there  is  no  limitation  of  out- 
put with  a  view  to  the  holding  up  of  prices,  a  system 
which  has  robbed  the  population  of  many  comforts 
that  it  might  otherwise  have  enjoyed. 

The  criticisms  of  labour  on  seUing  arrangements 
will  be  interesting  and  valuable.  Labour  representa- 
tives on  the  Trade  Councils  wiU  have  a  far  better 
conception  of  the  needs  of  the  public,  and  the  lines 
upon  which  manufacture  should  therefore  be  de- 
veloped, than  the  masters.  Labour  will  represent 
m  a  very  true  sense  the  great  buying  public,  and 
the  greatest  difficulty  of  the  manufacturer  in  the 
past  has  been  to  gauge  the  likely  trend  of  public 
opinion  and  thus  the  probable  movements  of  the 
market. 

The  moral  effect  of  these  elected  Trade  Councils 
wiU  be  tremendous,  and  it  is  a  higher  moral  tone 
that  IS  wanted  to  settle  the  great  capital  and  labour 
problem.     The  antagonism  of  capital  and   labour 
has  a  sordid  influence  upon  our  pubUc  life.     If  the 
nation  would  only  step  in  and  say  to  both  •  "  Make 
the  public  and  the  national  welfare  your  first  care 
and  then  look  after  yourselves,"  the  effect  would  be 
to  lift  the  whole  discussion  on  to  a  higher  plane. 
It  should  be  more  generally  recognised  that  the 
employing  classes  have  no  monopoly  either  of  virtues 
or  brams.     Indeed,  if  it  were  possible  to  analyse 


m 


LABOUR 


III 


half  a  dozen  workmen  and  hadf  a  dozen  employers 
it  would  be  found  that  the  workmen  would  contain 
a  higher  proportion  of  the  true  Christian  virtues, 
although  the  employers  might  hold  the  record  in  the 
matter  of  church  attendances.  Give  the  workman 
the  opportunity  to  know,  take  him  into  your  confi- 
dence, let  him  study  the  real  problems  of  industry, 
make  him  understand  that  he  is  an  agent  for  civilisa- 
tion, and  he  will  not  fail  to  respond.  The  £ioo  per 
head  of  exports  and  the  £500  per  head  of  produc- 
tion, which  we  ventured  to  set  before  ourselves  as 
an  audacious  ambition,  would  become  a  practical 
possibility  if  the  workmen  were  admitted  to  their 
proper  place  in  the  control  of  the  national  industrial 
activities. 

There  is  no  doubt  that  the  future  depends  upon 
co-operation  between  capital  and  labour.  The 
State  can  now  bring  this  much-desired  result  about, 
by  recognising  the  organisations  of  both  and  uniting, 
them  in  joint  controlling  bodies. 


ri 


u 


n 


CHAPTER  XI. 

ASSOCIATIONS  OF  TO-DAY. 

It  is  a  little  difficult  to  reconcile  the  outcry  for 
organisation  which  we  have  noted  in  a  previous 
chapter  with  the  fact  that  there  are  in  existence  to- 
day thousands  of  associations  and  societies  whose 
main  object  is  presumed  to  be  the  organisation  of 
trade.  The  war  has  brought  an  enormous  acces- 
sion of  strength  to  this  movement,  and  every  new 
Government  Order  brings  fresh  members  to  some 
trade  union  or  trade  association. 

Leaders  of  thought  call  aloud  for  organisation, 
traders  flock  to  join  their  federations  :  and  yet  we 
are  not  organised.    Why  ? 

A  certain  President  of  the  Board  of  Trade  in  a 
recent  private  conversation  supplied  the  answer 
to  this  conundrum.  "  A  difficulty  arises  in  connec- 
tion with  some  article,"  he  said,  "  and  after  studying 
it  I  send  for  the  officers  of  the  trade  association 
affected.  I  hear  their  views  ;  they  convince  me  of 
the  wisdom  of  a  given  hne  of  action,  and  accordingly 
I  make  an  Order  and  congratulate  myself  on  a  good 
day's  work.     But  no  sooner  is  the  Order  published 

112 


ASSOCIATIONS  OF  TO-DAY  113 

than  fifteen  other  bodies  of  whom  I  have  never 
heard  before  begin  to  bombard  me.      They  insist 
that  the  people  whom  I  have  seen  do  not  represent 
them,  that  I  have  been  '  had '  by  the  wrong  lot, 
and  that  I  ought  to  have  made  an  Order  in  the 
contrary  sense  to  that  which  I  have  adopted." 
This  perfect  picture  of  what  happens  daily  in 
.   almost  every  Government  office  sums  up  the  whole 
difficulty.    The  trouble  can  be  expressed  as  the 
absence   of   the   representative   principle.     In   trade 
nobody    represents    anybody.     The    position    was 
accurately  stated  by  Mr.  W.  L.  Hichens,  Chairman 
of  Messrs.  Cammell,  Laird  &  Co.,  in  an  address  to 
the  Incorporated  Association  of  Headmasters  when 
he  said  that  "  he  could  not  claim  that  his 'views 
represented  those  of  the  business  world.     Indeed 
he  did  not  know  what  the  views  of  the  business 
world  were,  for  as  things  were  constituted  to-day 
there  was  no  means  of  ascertaining  the  collective 
opinion  of  the  business  world  on  any  given  subject." 
A  glance  in  passing  at  the  present  position  of  the 
trade  association  movement  in  the  United  Kingdom 
and  elsewhere  will  enable  us  to  form  a  better  judg- 
ment on  the  suggestions  for  a  system  of  Statutory 
Trade  Councils,  Unions,  and  Associations  under  a 
Minister  of  Commerce,  which  it  is  the  object  of  the 
present  writer  to  promote. 

The  greatest  difficulty  which  confronts  the 
orgamser  of  a  trade  association  in  this  country  is 
the  pecuHar  characteristics  of  the  Briton.  He  has 
been  for  so  long  accustomed  to  play  his  own  Uttle 

H 


114        THE  TRADE  OF  TO-MORROW 

hand  that  he  does  not  take  kindly  to  the  idea  of 
co-operation.  But  among  the  many  changes  which 
have  come  over  us  in  the  last  two  years,  one  of  the 
most  marked  is  a  greater  wilhngness  to  co-operate, 
and  to  work  in  union  with  others.  The  difficulties 
of  carrying  on  business  at  all  in  a  state  of  war  have 
forced  many  business  men  to  seek  the  help  of  fellow- 
traders.  As  a  result  the  association  spirit  is  more 
strongly  developed  to-day  than  ever  before,  and  it 
is  possible  to  put  forward  a  suggestion  like  mine, 
which  almost  amounts  to  compulsory  membership 
of  a  trade  association,  when  two  years  ago  such  a 
suggestion  would  have  been  entirely  impracticable. 

The  existing  associations  divide  themselves  natu- 
rally into  two  chief  classes.  First,  there  are  those 
like  Chambers  of  Commerce  which  are  concerned 
with  all  trades,  and  secondly,  the  particular  trade 
association  which  deals  with  the  interests  of  one 
particular  industry. 

There  is  another  later  development,  an  attempt  to 
federate  trade  associations.  This,  however,  does 
not  appear  to  have  met  with  much  success.  There 
is  already  a  very  powerful  federation  of  Trade  Pro- 
tection Associations,  societies  which  are  concerned 
with  the  giving  of  credit  and  the  collecting  of  debts, 
and  the  winding  up  of  bankrupt  estates.  These 
Trade  Protection  Associations,  however,  must  not 
be  confused  with  the  class  of  trade  associations  we 
are  discussing. 

The  British  Empire  Producers'  Organisation  is 
a  body  of  some  importance  which  aims  at  securing 


ASSOCIATIONS  OF  TO-DAY  115 

the  adhesion  of  the  various  trade  associations  of 
the  country.    The  Federation  of  British  Industries 
is  a  stiU  more  pretentious  movement.    This  started 
after  the  outbreak  of  war  as  the  Institute  of  Industry 
and  had  the  advantage  of  a  speech  from  Sir  Edward 
Carson  at  its  inaugural  luncheon.    It  subsequently 
became  the  United  British  Industries'  Association 
and  was  widely  advertised  on  account  of  the  fact 
that  it  required  ;f  1,000  subscription.     Its  latest 
title  is  the  Federation  of  British  Industries,  and  the 
subscription  has,  I  understand,  become  £100, 

When  we  come  to  study  the  trade  associations 
proper,  we  find  some  thousands  of  bodies  with  very 
varying  objects.    At  the  head  of  the  hst  should  be 
placed  a  group  of  strong  societies  which  I  class 
together  as  Price  Associations.    They  are  most  of 
them  the  work  of  a  clever  body  of  accountants  in 
Birmingham,  who  have  succeeded  in  getting  the 
Bedstead  Trade,   the  Light   Castings   Trade    the 
Fender  Trade,  and  probably  a  dozen  other  industries 
into  well-organised  combines,  and  in  regulating  the 
pnces  of  the  output.    These  combines  exist  admit- 
tedly  for  the  simple  purpose  of  the  regulation  of 
prices,  and  while  in  some  cases  they  do  other  useful 
work  the  basis  of  their  organisation  is  price  main- 
tenance. 

Some  of  these  associations  have  the  most  inter- 
esting arrangements  with  labour.  The  Bedstead 
Federation  is  notable  in  this  respect.  Not  only  have 
they  succeeded  in  satisfying  labour  with  a  shding 
scale  based  upon  the  market  price  of  bedsteads,  but 


fv 


ii6        THE  TRADE  OF  TO-MORROW 

they  admit  the  labour  leaders  to  a  share  of  the  control 
of  the  industry,  and  in  that  way  arrange  a  complete 
boycott  of  non-associated  firms  so  far  as  labour  is 

concerned. 

Passing  from  these  Price  Associations,  the  next 
most  important  series  consists  of  those  societies 
which  have  their  being  simply  for  the  purpose  of 
fighting  labour.  After  these  comes  a  variety  of 
bodies,  some  of  them  local,  some  of  them  national 
in  their  activities,  and  most  of  them  having  special 
objects  arising  out  of  the  peculiar  needs  of  their 
particular  industries. 

Another  class  of  movement  is  to  be  noticed  in 
local  activities.  For  instance,  we  get  the  City  of 
Nottingham  appointing  an  Industrial  Council  and 
an  Industrial  Development  Officer. 

But  the  latest  and  the  most  interesting  trade 
association  is  to  be  foimd  in  connection  with  build- 
ing. There  has  within  the  last  few  months  been 
estabhshed  a  National  Industrial  Parliament  for 
the  building  industry.  This  body  is  to  have  the 
support  of  most  of  the  trade  unions  connected  with 
building  as  well  as  of  the  masters'  associations.  It 
is  the  most  serious  and  the  most  promising  effort 
that  I  have  come  across  for  the  settlement  of  out- 
standing differences  between  capital  and  labour. 
It  remains  to  be  seen  whether  as  a  purely  voluntary 
body  the  Builders'  Industrial  Parliament  is  open  to 
the  danger  which  has  proved  fatal  to  most  voluntary 
bodies,  that  it  depends^ipon  the  energies  and  enthu- 
siasm of  its  promoters  and  their  successors  to  keep 


ASSOCIATIONS  OF  TO-DAY 


117 


it  in  being  ;  whereas  if  it  could  become  a  part  of  our 
constitutional  arrangements,  be  continually  subject 
to  the  introduction  of  new  life  by  the  process  of 
election,  its  future  and  its  continued  usefulness 
would  be  assured. 

Looking  broadly  at  the  whole  Association  Move- 
ment as  it  is  to-day,  one  must  come  to  the  conclu- 
sion that  it  is  a  failure.  The  only  bodies  that  can 
claim  any  real  practical  achievement  are  the 
"  Price "  Associations,  and  these  are  obviously 
of  a  dangerous  and  undesirable  nature.  The  first 
necessity  is  lacking  in  all  other  cases.  The  prime 
essential  in  any  public  body  is  an  element  of 
authority,  a  status,  a  definite  responsibility. 

This  essential  is  provided  when  prices  are  taken 
in  hand  by  the  creation  of  a  pool,  with  fines  and 
penalties  and  other  conditions,  but  those  societies 
which  do  not  go  the  length  of  that  process,  lack  any 
means  to  keep  the  trade  together,  to  secure  respect 
for  their  decisions,  or  even  to  secure  the  nominal 
adhesion   of  the  majority  of  their  constituency. 
These  conclusions  are  drawn  not  from  a  few  isolated 
cases,  but  from  a  full  study  of  the  whole  extensive 
movement.    The  result  is  that  trade  associations 
crop  up  and  die  down  with  a  rapidity  and  regularity 
which  is  both  perplexing  and  discouraging  to  the 
behever  in  co-operative  action.    The  need  for  asso- 
ciation is  felt  and  admitted  by  all,  and  yet  the  failure 
of  associations  in  trade  cannot  be  seriously  disputed. 
It  is  for  the  Government  to  give  the  answer  to  this 
conundrum.     If  trade  organisations  were  recognised. 


■♦ 


ii8        THE  TRADE  OF  TO-MORROW 

if  they  were  put  upon  a  representative  basis,  if  they 
were  made  part  of  the  constitution  under  which  we 
live,  they  would  prove  to  be  the  most  valuable  of 
all  the  public  authorities. 

British  trade  associations,  taken  as  a  whole, 
suffer  by  comparison  with  German  and  American 
bodies  in  exactly  the  same  way  that  British  in- 
dividual businesses  often  compare  unfavourably 
with  more  recently  established  concerns  in  newly 
developed  countries.  There  are  among  them  so 
many  different  grades.  They  have  not  had  the 
advantage  of  recent  establishment  upon  the  most 
approved  system.  Nevertheless,  there  is  the  basis 
of  a  national  system  of  trade  association,  a  basis 
upon  which  the  Government  should  build  the 
national  trading  machine  that  is  now  so  urgently 
required. 

The  present  position  is  very  admirably  summarised 
in  an  article  on  Capitalism  after  the  War,  that 
appeared  in  the  New  Statesman  of  February  3rd, 
1917  :— 

"  Another  development  of  capitahsm,  to  which 
the  Government  is  extending  no  little  encourage- 
ment, is  the  systematic  association  of  all  the 
manufacturers  of  an  industry  into  a  single  body, 
for  the  collective  management  of  the  whole  industry 
within  the  United  Kingdom.  The  Committee  of 
the  Privy  Council  for  aiding  scientific  and  industrial 
research  finds  considerable  difficulty,  without  such 
associations  in  the  several  industries,  of  getting  rid 
of  the  million  sterling  which  the  Government  has 


ASSOCIATIONS  OF  TO-DAY 


119 


allocated  for  this  purpose.  The  secretive  methods 
of  the  various  employers  within  an  industry,  each 
anxious  to  reserve  for  himself  all  the  advantages 
from  which  he  can  possibly  exclude  his  British 
rivals,  place  all  alike  at  a  disadvantage  against  the 
well-organised  Cartel  or  Trust  which,  in  Germany 
or  the  United  States,  so  often  controls  the  whole 
of  the  national  output.  It  would  be  much  more 
convenient  to  the  Government,  it  would  faciUtate 
the  employment  of  scientific  experts  and  enable 
experiments  to  be  conducted,  if  all  the  competing 
firms  would  combine,  at  any  rate  for  specific  pur- 
poses. They  might  unite,  it  is  being  authoritatively 
suggested,  for  representation  in  foreign  countries, 
and  agree  to  '  pool '  their  export  trade. 

"  The  active  encouragement  of  the  Government 
to  this  pohcy  of  an  associated  industry  is 
now  being  manifested  by  all  departments  in  all 
sorts  of  ways.  Association  is  accordingly  pro- 
ceeding at  a  great  rate.  Sometimes  what  is 
formed  is  a  mere  scientific  society,  for  promoting 
research  and  experiment  for  the  common  benefit 
of  all  the  manufacturers  in  the  industry, 
and  for  putting  up  a  fund  from  voluntary 
subscriptions  to  meet  an  equivalent  Government 
grant.  Such  a  scientific  society  of  manufacturers 
in  a  single  industry  very  quickly  takes  on  other 
functions,  and  easily  becomes  the  starting-point  for 
price  agreements,  pools,  and  eventually  a  Cartel  or 
a  Trust. 

"  Now,  this  steadily  progressing  substitution  of 


120        THE  TRADE  OF  TO-MORROW 

Trusts,  Cartels,  or  mere  associations  of  particular 
industries  for  the  crowd  of  jostling  competitors  on 
whom  we  have  been  accustomed  to  rely— a  sub- 
stitution which   the    Government    is    now    half- 
consciously  fostering— is,   doubtless,  an   inevitable 
development.    In  so  far  as  it  means  the  substitution 
of  dehberate   order  and  system,   knowledge   and 
prevision,   for  the  'happy-go-lucky,'  hit  or  miss 
ventures  of  the  capitahst  entrepreneur  of  the  last 
century,  the  change  is  one  to  be  welcomed.     Com- 
bination for  buying  materials,  for  scientific  research, 
for  standardising   components   and  products,   for 
obtaining  new  markets,  for  advertising,  for  represen- 
tation in  this  country  and  abroad,  promises  very 
considerable  economies,  not  only  in  cost,  but  also 
in  the  continuity  of  production  that  it  permits. 
We  cannot  afford,  as  a  nation,  to  continue  the  waste 
that  is  involved  in  individual  competition. 

"  But  individual  competition,  as  it  has  been  acutely 
remarked,  is  the  consumer's  substitute  for  honesty 
in  the  producer.  Competition,  expensive  as  it  may 
be,  does  at  least  purport  to  protect  us  against 
having  to  pay  more  for  an  article  than  its  actual 
cost  of  production  and  normal  profit.  If  we  are, 
as  a  nation,  to  be  deprived  of  this  substitute  for 
honesty,  with  the  consent  and  even  the  assistance 
of  the  Government,  we  ought  to  ask  the  Government, 
Very  insistently,  how  it  is  proposed  to  prevent  the 
new  monopoHes  from  putting  up  their  prices — as  we 
have  already  found  happening  in  the  case  of  sewing 
cotton— and  thus  subjecting  the  whole  population 


ASSOCIATIONS  OF  TO-DAY 


121 


to  an  unnecessary  taxation,  which  is  likely  soon 
to  rival  in  magnitude  even  that  of  the  Government 
itself.  Will  the  Government  insist,  with  regard 
to  all  these  combinations,  on  something  in  the 
nature  of  the  '  sliding  scale  clauses '  imposed  on 
gas  companies,  whereby  every  increase  in  the 
dividend  to  the  shareholders  is  made  dependent 
on  an  equivalent  reduction  of  price  to  the  con- 
sumer ?  It  may  be  that  combination  lowers  costs, 
but  without  some  such  provision  it  does  not  follow 
that  monopoly  lowers  price.'* 

The  union  of  Labour,  Capital,  and  the  State  in 
a  three-sided  partnership  in  Trade  Councils  would 
provide  the  answer  to  the  New  Statesman's  doubts. 


pr 


CHAPTER  XII. 
TRADE   ORGANISATIONS    ABROAD.' 

So  far  I  have  made  very  Httle  reference  to  Germany 
and  to  that  extent  I  have  differed  from  the  methods 
of  most  of  those  who  are  preaching  the  need  for 
alteration  m  our  trading  methods. 

The  serious  reader  will  desire  to  study  the  question 
of  the  permanent  organisation  of  trade  upon  its 
ments  alone,  and  will   not   be  influenced  by  any 
considerations  arising  directly  out  of  the  feelings 
of  antagonism  existing  between  the  enemy  and 
ourselves.    While  my  suggestions,  if  they  improve 
our  trading  capabiHties,  will,  undoubtedly  have  the 
effect  of  putting  us  in  a  better  position  to  compete 
with  other  nations,  I  do  not  base  my  demands 
upon  any  considerations  of  rivalry  between  our- 
selves and  anyone  else.     I  claim,  that  if  we  are  to 
keep  a  place  at  all  in  the  industrial  race,  we  must 
improve  our  methods  and   become  more  efficient 
and  in  studying  suggestions  to  that  end  it  is  use^ 
ful  to  consider  what  has  been  done  in  other  places 
For  that  reason  I  propose  to  touch  briefly  upon 


122 


TRADE  ORGANISATIONS  ABROAD      123 

the  organisation  of  trade  as  we  find  it  in  Germany 
and  elsewhere. 

I  am  of  opinion  that  too  much  importance  is 
attached  to  a  great  deal  that  we  hear  about  Govern- 
ment assistance  to  German  trade,  bounties,  subsidies, 
railway  rates,  and  the  Hke.  It  is  extremely  difficult 
to  arrive  at  the  facts  in  these  matters,  but  the  results 
of  my  observations  lead  me  to  think  that  the 
German's  success  in  commercial  matters  has  been 
due  to  a  system  of  more  or  less  voluntary  associa- 
tions, and  still  more  due  to  the  fact  that  his  trade 
is  new,  that  he  is  not  hampered  by  old  traditions, 
by  out-of-date  methods,  by  small  ideas,  and  even 
more  to  the  fact  that  he  has  a  far  better  imder- 
standing  of  the  value  of  science  and  co-operation 
in  trade  than  obtains  here. 

The  Germans  have  developed  the  syndicating 
and  cartehsation  of  trading  concerns  to  an  extra- 
ordinary degree  of  perfection.  The  object  of  these 
organisations  is  very  largely  the  elimination  or 
limitation  of  internal  competition,  and  such  a 
systematic  co-operation  as  will  secure  to  the  alHed 
firms  advantages  which  are  beyond  their  reach  so 
long  as  each  fights  for  its  own  end.  This  move- 
ment has  now  been  in  active  progress  for  over 
thirty  years,  and  the  combinations  or  cartels  take 
many  forms.  There  are  conventions  fixing  the 
general  conditions  upon  which  goods  shall  be  sold, 
a  loose  class  of  association  which  approximates  very 
closely  to  many  of  our  own  trade  societies.  But 
the    most    important    development    is   the   fully 


lit 


A 


124        THE  TRADE  OF  TO-MORROW 

fledged  syndicate  or  cartel  which  regulates  pro- 
duction, prices,  and  sales,  and  leaves  to  the  asso- 
ciated works  merely  the  functions  of  producing  the 
goods  and  dispatching  them  to  the  buyers 

These  syndicates  are  generaUy  described  as  the 
result  of  Protection,  but  while  a  protective  tariff 
has  undoubtedly  enabled  them  to  carry  out  their 
purpos^  more  effectively,  it  is  agreed  by  a  large 
body  of  opinion  in  Germany  itself  that  protection 
has  httle  to  do  with  the  formation  of  these  cartels, 
and  IS  not  necessary  to  their  success.  Many  syndi- 
cates mdeed  existed  in  Germany  before  protective 
duties  were  introduced  at  all. 

The  outstanding  feature  of  the  system  of  German 
orgamsation  is  the  development  of  central  bodies 
to  control  sales  and  to  allocate  to  each  works  that 
part  of  the  production  which  it  is  best  fitted  to 
undertake.  The  result  of  the  workings  of  this 
system  is  that  German  factories  are  kept  going 
upon  particular  classes  of  work,  do  not  each  attempt 
to  manufacture  everything,  are  able  to  speciahse  on 

pr'Surtbn^°^'^''  ^^  ^^"^  '"""^^  ^*^  '^^^P^" 
According  to  The  Times,  the  Germans  are  still 
further  developing  this  feature  during  the  progress 
of  the  war.  ^ 

"In   the   campaign  for  economy,  factories   and 
workshops  are  being  standardised  and  specialised 
Wherfe  two  shops  in  a  given  area  formerly  produced 
mdiscnmmately  two  classes  of  goods,  one  factory 
has  now  taken  over  altogether  one  class  and  the 


TRADE  ORGANISATIONS  ABROAD     125 

other  factory  the  other  class.    Sometimes  machinery 
has  been  exchanged." 

We  must  remember  that  we  were  in  business 
centuries  before  Germany  really  started.  Forty 
years  ago  Germany  had  no  commercial  position. 
Starting  at  a  time  when  manufacturing  was  past 
the  experimental  stage,  Germany,  like  America, 
had  the  advantage  of  our  experience.  German 
businesses,  on  the  average,  are  built  upon  a  larger 
scale  than  ours.  They  possess  from  their  very 
newness  advantages  which  are  denied  to  us.  For 
this  reason  Germans  have  less  need  for  organisa- 
tion than  we  have,  and  yet  it  cannot  be  denied  that 
they  possess  to-day  far  more  organisation  than  we 
do. 

Mr.  T.  M.  E.  Armstrong,  in  his  Presidential 
Address  to  the  Insurance  Institute  of  London, 
says  :— 

"  Our  enemies  in  Germany  have  proved  them- 
selves great  masters  in  the  art  of  organisation. 
The  unfortunate  thing  is  that  beyond  organisation 
they  have  none  of  the  finer  virtues.  We,  however, 
have  all  the  finer  virtues  but  none  of  the  organisa- 
tion." 

So  far  from  the  German  State  having  much  to 
do  with  the  organisation  of  German  trade,  I  am 
incUned  to  think  that  the  organisation  of  trade 
has  been  allowed  to  become  an  abuse,  and  that 
the  German  State  may  find  it  necessary  to  take 
the  matter  in  hand  and  regulate  it  and  restrict  it. 
In  this  way  we  have  to-day  an  advantage  which  is 


I 


126        THE  TRADE  OF  TO-MORROW 

tT^t  !f  ^"™f  y-  The  need  for  organisation  is 
admitted,  but  the  practice  of  it  has  not  reached 
such  a  stage  that  the  State  cannot  come  in  and 
guide,  control,  and  encourage,  without  upsetting 
large  vested  interests.  ^  ^ 

This  is  one  of  the  ways  in  which  the  war  has  been 
of  great  advantage  to  us.  It  has  suspended  our 
ordinary  operations,  caused  a  definite  break  in 
our  habits,  and  if  a  new  system  can  be  inaugurated 
before  we  return  to  our  old  ways,  reforms  and  im- 
provements will  be  comparatively  easy 

While  the  German  is  a  creature  who  seems  to 
like  to  be  organised,  the  Englishman  and  the 
Amencan  have  not  that  pecuharity.  The  organisa- 
tion of  trade  in  the  United  States  also  is,  however, 

^^  .  .f  ^  ^^^'  *^  j^^^^^  ^"  ^  ^ore  advanced 
state  than  here.  The  trade  associations,  of  which 
there  are  great  numbers,  are  taken  far  more  seriously 
and  made  more  use  of  by  their  members  than 
similar  bodies  in  this  comitry.  It  is,  for  instance, 
quite  usual  for  Trade  Congresses  to  pubhsh  huge 
volumes  of  Proceedings,  showing  that  much  more 
importance  is  attached  to  the  meetings  of  these 
bodies  than  obtains  on  this  side  of  the  Atlantic 

The  trade  association  proper  in  America  would 
appear  to  be  httle  more  than  a  trade  parhament 
for  the  discussion  of  domestic  problems.  One 
interesting  development  which  comes  very  close 
to  our  subject  is  the  estaWishment  of  export  as- 
sociations for  the  promotion  of  co-operative  effort 
in  foreign  trade.    Some  of  these  associations  have 


TRADE  ORGANISATIONS  ABROAD     127 

been  remarkably  successful,  and  many  of  them  keep 
up  expensive  staffs  of  foreign  travellers  for  the 
benefit  of  their  members,  collecting  orders  and  dis- 
tributing them  to  suitable  factories.  They  appear 
to  thrive  most  in  trades  Hke  hardware,  where 
internal  competition  is  to  some  extent  limited. 
Each  hardware  house  has  its  own  brands  or  pat- 
terns or  patents,  and  the  foreign  orders  which  are 
taken  for  these  particular  goods  come  as  a  matter 
of  course  to  their  makers.  No  question  arises  in 
cases  like  these  as  to  the  allocation  of  orders  be- 
tween rival  houses. 

But  the  outstanding  feature  of  American  organ- 
isations is  the  Trust.  A  Trust  is  not  really  an 
organisation  at  all  in  the  sense  in  which  we  are 
now  using  that  word.  It  is  simply  a  huge  single 
individual  business,  with  one  banking  accoimt, 
one  control,  and  one  interest.  It  has  no  concern 
with  the  welfare  of  an  industry.  It  has  nothing 
to  do  with  the  interests  of  the  State.  It  is  simply 
a  single  unit  in  the  commercial  world,  just  as  is 
the  smallest  shopkeeper.  Its  powers  for  good  or 
evil  are  derived  from  its  size  and  its  consequent 
wealth. 

The  Trust  is  a  very  natural  but  unfortunate 
outcome  of  the  tendency  to  co-operate  and  work 
together  among  business  men.  It  is  the  logical 
outcome  of  the  voluntary  trade  association,  and 
it  will  arrive  in  Germany  and  in  this  covmtry 
unless  Governments  have  the  sense  to  take  the 
movement  in  hand  in  time. 


«• 


128        THE  TRADE  OF  TO-MORROW 


[^The  abuses  from^  which  Trusts  seem  to  be  in- 
separable became  so  apparent  in  America  as  to 
necessitate  the  Clayton  Anti-Trust  Law,  and 
America  is  now  engaged  in  endeavouring  to  dis- 
solve some  of  these  huge  corporations.  How  far 
that  endeavour  is  succeeding  is  a  matter  of  opinion. 

I  need  not  emphasise  the  dangers  of  the  Trust. 
It  is  a  purely  selfish  organisation,  which  is  contrary 
to  the  interests  of  labour,  to  the  interests  of  the 
consumer,  and  to  the  interests  of  the  nation.  It 
is  designed  simply  in  the  interest  of  the  capitahst. 

It  must  not  be  supposed  that  the  Trust  is  in- 
variably a  success  even  from  its  own  point  of  view. 
The  American  Steel  Trust,  one  of  the  biggest  of 
its  kind,  is  so  hopelessly  over-capitalised  and  has 
spent  so  much  of  its  resources  in  a  fruitless  endeavour 
to  control  the  market,  that  its  history  is  a  dismal 
one.  In  their  efforts  to  absorb  all  the  best  manu- 
facturing plant  in  America,  and  so  obtain  a  monopoly, 
the  officials  of  the  Steel  Trust  had  by  1907  loaded 
that  concern  with  five  per  cent,  bonds  to  the 
amount  of  one  himdred  and  twenty  millions,  and 
even  then  they  did  not  succeed  in  tempting  more 
than  half  the  steel  manufacturers  of  the  United 
States,  and  this  failure  to  secure  full  control  has 
cost  the  Trust  and  the  Steel  Trade  of  America  dear. 

The  Clayton  Anti-Trust  Law  has  had  another 
curious  effect,  which  bears  directly  upon  the  sub- 
ject of  discussion.  In  legislating  for  the  abolition 
of  Trusts,  Congress  appears  to  have  produced  a 
measure  which  aboUshes  also  trade  associations. 


TRADE  ORGANISATIONS  ABROAD      129 

The  Report  of  the  Proceedings  of  the  International 
Trade  Conference,  held  at  New  York  in  December, 
1915,  says : — 

"  As  a  result  of  the  passage  of  the  Clayton  Anti- 
Trust  measures,  we  are  to-day  hopelessly  handi- 
capped in  our  efforts  to  build  up  foreign  markets. 
Forced  to  meet  organised  forces  of  production  in 
foreign  markets,  our  manufacturers  are  denied  the 
right  of  co-operative  effort,  and  are  obliged  to  send 
individual  representatives  into  foreign  markets ; 
they  are  forbidden  the  right  of  an  agreement  on 
prices  in  such  markets,  and  are  actually  forced  to 
compete  against  each  other,  thus  making  the 
business  unprofitable  to  all,  to  the  entire  satisfaction 
of  foreign  competitors.  An  arrangement  for  the 
pooling  of  expenses  and  the  dividing  of  profits 
would  result  in  a  more  intensive  and  far  less 
expensive  handling  of  a  foreign  market  in  a 
particular  line. 

"It  is  encouraging  to  note  that  the  Federal 
Trade  Commission  is  seriously  studying  these  prob- 
lems of  organisation,  and  that  it  is  giving  every  evi- 
dence of  an  earnest  desire  to  be  of  real  assistance 
to  the  manufacturing  industries  of  this  country 
in  the  movement  to  build  up  our  foreign  markets. 
We  have  every  reason  to  hope  that  the  Commission's 
investigation  will  lead  it  to  recommend  to  Congress 
an  amendment  to  the  Trust  Act  permitting  com- 
bination in  foreign  trade  on  a  fair  and  equitable 
basis." 

As  might  be  expected,  this  alteration  of  the  law 


I,, 
t 


II 


130        THE  TRADE  OF  TO-MORROW 

to  the  detriment  of  trade  associations  has  given 
a  filhp  to  the  association  movement,  and  these  bodies 
are  stronger  to-day  than  ever,  and,  curiously  enough, 
are  all  demanding  assistance  from  the  Government 
and  various  rights  and  privileges  of  much  the  same 
kind  as  are  asked  for  here.  The  same  Report 
.  says  : — 

"  To  place  us  in  a  position  where  we  may  be  able 
to  compete  successfully  in  foreign  markets,  there 
is  needed  intensive  organisation  of  our  industries  for 
the  elimination  of  waste,  and  the  development  of 
greater  efficiency.  To,  keep  down  sales  costs  in 
foreign  markets,  our  manufacturers  must  have  the 
right  of  combination  in  the  foreign  field." 

The  National  Foreign  Trade  Council,  another 
body  which  has  been  dealing  with  the  matter,  calls 
attention  to  the  need  for  consolidating  American 
forces  for  the  securing,  and  more  particularly  for 
the  retention,  of  foreign  commerce.  It  points  out 
that  the  revival  of  peace  activities  in  Europe  will 
completely  alter  the  situation  to  American  dis- 
advantage. 

"  Europe's  accustomed  instrument  for  these 
activities  will  be  co-operative  effort,  beginning  with 
cartels  and  trade  associations  of  producers,  manu- 
facturers, exporters,  and  bankers,  reinforced  by 
the  backing  of  the  State,  and,  unless  the  discussions 
with  which  industrial  Europe  now  vibrates  shall 
fail,  supplemented  by  economic  alliances  succeed- 
ing the  war  alliances  now  in  force.  Continuance  of  the 
present  condition  spells  European  industrial  and 


TRADE  ORGANISATIONS  ABROAD      131 

Governmental  co-operation  versus  American  com- 
pelled competition." 

The  situation  in  America  seems  to  be  not  unlike 
the  situation  here.  America  has  the  same  advantages 
that  we  have  noticed  in  the  case  of  Germany,  of 
being  much  younger  in  trade  than  we  are,  of  having 
started  on  a  more  modern  basis,  of  operating  with 
larger  units,  of  better  education,  and  of  a  greater 
national  interest  in  trading  matters.  Apart  from 
this,  it  has  such  doubtful  advantage  as  comes 
from  the  possession  of  a  number  of  trusts,  and, 
in  addition,  it  enjoys  the  benefits  of  a  system 
of  voluntary  trade  associations  which  secure  more 
general  support  than  is  given  to  similar  bodies 
in  this  country,  and  which  are  at  present  engaged 
in  demanding  from  the  American  Government 
rights  and  privileges  such  as  those  which  I  suggest 
ought  to  be  given  to  our  own  trade  associations. 

It  will  thus  be  seen  that  the  tendency  of  trade 
all  over  the  world  is  towards  association.  Manu- 
facturers everywhere  have  come  to  realise  that 
they  must  combine.  This  universal  conclusion 
is  fraught  with  grave  dangers,  as  is  shown  by  the 
experiences  of  Germany  and  America,  as  well  as 
by  the  minor  experiences  that  we  have  already 
had  in  this  country. 

Unrestricted  co-operation  among  producers  must 
lead  to  price  rings  or  trusts.  Further,  it  must 
lead  to  a  widening  of  the  gap  between  capital  and 
labour.  It  is  none  the  less  necessary,  because  only 
by  combination  can  production  be  raised  to  a  point 


!l 


It 


132        THE  TRADE  OF  TO-MORROW 


that  will  meet  the  needs  of  humanity.  We  are 
therefore  doomed  here,  as  everywhere  else,  to  a  great 
development  of  trade  combination. 

We  are,  however,  in  the  fortunate  position  that 
that  development  has  not  yet  reached  the  stage 
where  it  has  become  unmanageable  or  dangerous, 
and  there  is  still  the  opportunity  for  statesmen  to 
step  in  and  use  these  proved  tendencies  for  the 
nation's  good.     That  opportunity  has  always  ex- 
isted to  a  certain  extent,  but  to-day,  when,  as  Mr. 
Lloyd  George  has  put  it,  "  the  whole  state  of  society 
is  more  or  less  molten,  and  you  can  stamp  upon 
that  molten  mass  almost  anything,  so  long  as  you 
do  so  with  firmness  and  determination,"  there  is 
a  chance  that  will  never  return  for  statesmanship, 
and  for  the  establishment  of  an  ideal  system  of 
co-operation,  in  which  not  only  manufacturers  but 
labour  and  the  State  are  combined  for  the  good 
of  all.     That  opportunity  will  last  only  so  long  as 
present   conditions   continue,   and  will   pass   very 
rapidly  when  peace  is  restored. 


CHAPTER   Xni. 


THE  BOARD  OF  TRADE  AND  THE  MINISTRY 
OF  INDUSTRY  AND  COMMERCE. 

The  advocates  of  the  appointment  of  a  Minister 
of  Commerce  frequently  make  the  error  of  abusing 
the  Board  of  Trade.  Destructive  criticism  is  so 
easy,  and  looks  so  well  in  print,  that  many  of  the 
supporters  of  a  Ministry  of  Commerce  are  tempted 
to  make  out  a  case  against  the  Board  of  Trade, 
chiefly  through  lack  of  ability  to  set  up  a  sufficiently 
good  case  of  their  own.  It  seems  to  be  assumed 
that  the  appointment  of  a  Minister  of  Commerce 
would  upset  the  Board  of  Trade  or  be  opposed 
by  that  Department  or  constitute  a  reflection 
upon  its  activities. 

This  is,  however,  a  very  short-sighted  and  in- 
adequate view  of  the  situation.  There  is  ample 
precedent  for  two  or  three  Government  Depart- 
ments working  within  the  same  sphere  and  yet  in 
no  essential  way  overlapping.  The  Local  Govern- 
ment Board,  the  Board  of  Education,  and  the 
Home  Office,  are  all  engaged  in  looking  after  local 
authorities.  The  first  two,  in  particular,  work 
through  the  same  bodies  ;  the  County  Council  is  the 
medium  for  the  operations  of  the  Board  of  Educa- 

133 


i 


134        THE  TRADE  OF  TO-MORROW 


II' 


tion,  while  being  also  under  the  control  of  the  Local 
Government  Board.  The  Home  Office,  in  many 
of  its  departments,  covers  the  activities  of  local 
authorities.  For  the  purposes  of  war  we  have 
three  distinct  Departments:  the  Admiralty,  the 
War  Office,  and  the  Ministry  of  Munitions,  while 
m  the  case  of  the  Board  of  Trade  itself  a  separate 
Ministry  has  now  been  set  up  to  deal  with  the 
problems  of  Labour. 

A  well-constituted   Company  takes  care  that  its 
Board   of   Directors   consists   of   carefully   chosen 
persons    with    different    interests    and    functions. 
Every  Board,  to  be  really  successful,  should  have 
on  it  a  "  pusher  "  and  a  "  brake."    A  commercial 
concern  which  does  not  possess  a  man  whose  sole 
interest  is  to  promote  production  or  increase  turn- 
over, is  doomed  to  failure  ;  but  unless  that  Board 
also  possesses  a  person  who  will  act  as  brake  and 
will  modify  and  control  some  of  the  schemes  of 
the     pusher,     disaster     is     also     assured.      This 
illustration  seems  to  cover  the  case  of  the  Govern- 
ment in  its  relation  to  the  trade  of  the  country.     It 
has  a  brake,  indeed  some  people  think  a  far  too 
powerful  brake,   in  the  Board   of  Trade;  but  it 
has  never  had,  and  this  is  what  it  must  have  in  the 
future,  a  pusher,  a  development  officer,  an  improve- 
ment minister,  such  as  the  Minister  of  Commerce 
of  the  future  will  have  to  be. 

The  President  of  the  Board  of  Trade  is  responsible 
for  the  enforcement  of  Acts  of  Parhament  restrict- 
ing and  regulating  the  operations  of  trade,  commerce, 


THE  BOARD  OF  TRADE 


135 


and  industry.  That  is  a  necessary  function  which 
must  be  maintained  in  the  future.  The  only  mistake 
that  the  Board  of  Trade  has  made,  and  it  is  coming 
to  be  recognised  as  a  mistake,  is  that  it  has  endeav- 
oured to  introduce  among  its  legitimate  functions 
a  few  half-hearted  attempts  to  further  the  interests 
of  industry.  In  the  Commercial  Intelligence  Branch 
and  the  Exhibitions  Branch,  two  absurdly  small 
departments,  it  has  attempted  the  work  of  pro- 
moting trade. 

The  rimes  Trade  Supplement,  October,  1916,  gave 
a  most  useful  list  of  some  of  the  principal  activities 
of  the  Board  of  Trade.  That  list  is  reprinted  here 
because  its  mere  recitation  is  quite  sufficient  to 
establish  beyond  question  the  case  for  a  separate 
Ministry  to  undertake  the  work  of  promoting  trade. 
The  duties  set  out  in  this  long  catalogue  will  be  f oimd 
upon  examination  to  be  the  regulation  and  restric- 
tion of  traders'  activities,  and  in  only  one  or  two 
respects  can  they  have  any  sort  of  relation  to  such 
questions  as  output,  turnover,  export,  education, 
elimination  of  waste,  improved  methods,  and  all 
the  other  great  problems  that  are  awaiting  the  atten- 
tion of  the  Minister  of  Commerce. 


/ 


Q 
< 


Harbour 
Dept. 


^  — Harbours. 
I  — Lighthouses. 

— Pilotage. 

— Foreshores. 

— Port  of  London. 
^  — ^Navigable  Channels,  Ports,  etc. 

— Interference  with  Tidal  Water. 

— Local  Charges  on  Shipping. 

— Wrecks :  Salvage,  etc. 

— Loans  to  Harbour  Authorities. 

— Danube  Navigation. 


i 


,t 


136        THE  TRADE  OF  TO-MORROW 


/ 


Provisional 
Orders  and 

O^J  Administra- 

§  1  tion. 


S  ^Sub.  Dept. 


Inquiries. 


Consular. 


W 
H 

Si 

m 

Q 

z 
< 


Wreck. 


-Piers  and  Harbours. 
— Pilotage. 

-Electric  Lighting. 

-Gas  and  Water  Cos. 
— Gas  Returns. 
—Metropolitan  Gas  Cos. 
—Sanitary  Conventions. 
— Quarantine. 

—Electrical  Standards  Laboratory. 
— Wreck  Inquiries. 

— Colonial  Inquiries. 
—Deaths  on  Board  Ship. 
-Boiler  Explosions. 

— Instructions. 
— ^.Jurisdiction. 
"j  — Conventions. 
— Fees. 

—International  Questions. 

— Depositions. 
—Wreck  Statistics. 
—Instructions  to  Receivers. 
—Rewards  for  Life  Saving 
V  —Rocket  Apparatus. 


-i 


Colonial  Acts    (  —^^Sistry  of  Ships. 

and  J  —JJeasurement  of  Tonnage. 


and 
Ordinances. 


Surveys. 


Mercantile 
Marine. 


I 


1  —Passenger  Steam  Ships. 
(  —Emigrant  Ships. 
I  —Cattle  Ships. 

/  — Load  Line. 

— Crew  Spaces. 

— Deck  Cargoes. 
J  — Grain  Cargoes. 

— Dangerous  Goods. 

—Ships'  Lights. 
V  — Lile  Saving  Appliances. 

— Surveyors. 

f  —Engagement  of  Seamen 
—Discharge  of  Seamen. 
— Crimping. 

— Transmission  Scheme. 
—Health  of  Crews. 
— Apprentices. 
— Lascars. 
— Sailors'  Homes. 


THE  BOARD  OF  TRADE 


137 


Q 

M 

Z 

< 


H 

W 
Q 

< 


Q 

2 

o 
u 


Mercantile 
Marine. 


Sub  Dept. 
Office  of  the 
Registrar- 
Gen,  of  Ship- 
ping and 
Seamen. 


Railway 
Dept. 


'  — Distressed  Seamen  Abroad. 
— Hospitals  Abroad. 
— Crimes  at  Sea. 

— Examination  of  Masters,  Mates,  and  Engineers. 
— Examination  of  Skippers  and  Second  Hands  of 

Fishing  Boats. 
— Fishery  Conventions. 
— Naval  Reserve. 
— Local  Marine  Boards. 
— Mercantile  Marine  Offices. 
— Instructions  to  Superintendents. 
— Instructions  to  Colonial  Offices. 
—Rule  of  the  Road. 
— Signals. 

— Merchant  Shipping  Legislation. 
— Registry  of  Ships. 
— Liability  of  Shipowners. 
— ^Average. 
—Freight. 
— Merchant  Shipping  (Fishing  Boats)  Acts. 

— Registration  of  Ships. 
— Issue  of  Certificates  to  Officers. 
— Custody  of  Official  Logs,  etc. 
— Quinquennial  Census  of  Seamen. 
— Information  whereabouts  of  Seamen. 
'  — Royal  Naval  Reserve. 

/  — Railways. 

— Canals. 

— ^Tramways. 
.  — Provisional  Orders  :  Tramways. 
H   — Railway  Returns. 

— Canal  Returns. 

— ^Tramway  Returns. 

— Light  Railways. 
^  — Explosives  Act,  1875. 

— By-laws  of  Railway  Cos. 


r 


Companies 
Dept. 


Sub  Depts.       ] 


— Standard  Weights  and  Measures. 
— London  Traffic  Branch. 


-< 


Sub  Dept. 


/  — Companies. 
— Limited  Partnerships. 
— Life  Assiurance. 
— Employers'  Liability  Insurance. 
— Fire  Insurance. 

— Accident  and  Sickness  Insurance. 
— Bond  Investment  Insvurance. 
— Art  Unions. 

— Registration  of  Newspaper  Proprietors. 
— Moneylenders'  Exemptions. 

— Companies  (Winding-up). 


138         THE  TRADE  OF  TO-MORROW 


If 


i 


s 

Q 

O 

M 

O 


H 

w 

o 
n 
< 


Commercial 
Dept. 


/  —Commercial  Questions  Generally. 
/  —Commercial  Treaties. 

-FnrpIS;  ?"f  r  ?^^f^^^  ^^^^  ^ugar  Convention. 
— i^oreign  and  Colonial  Tariffs. 

Tobm^f"^^    ^""^    Foreign    Countries    and 
— Special  Tariff  Returns. 
—Statistics,  Trade  and  other. 
—Commercial  Intelligence. 
— Statistical 

Abstracts  for— United  Kingdom. 
— Colonies. 
— Foreign  Countries. 
^.  ,  ^       — British  Empire. 

—Digest  of  Colonial  Statistics. 
—Railway  Statistics  and  Report. 
— Cotton  Statistics. 
—Shipping  and  Navigation   (monthly  accounts 

and  annual  statement). 
—Supervision  of  Monthlv  Trade  Accounts  and 

Annual  Statement  of  Trade 
—Translating  for  all  Departments. 
— Board  of  Trade  Journal. 

—Trade  of  Foreign  Countries  (monthly  accounts), 
— Commercial  Missions. 
—Commercial  Representations  in  Dominions 
— Dissemmation  of  Commercial   Infonnation 
—Commercial  Editing  of  Consular  Reports. 
— Indexmg  of  Consular  Reports  on  Trade 
—Patents,  Designs,  and  Trade  Marks. 
— Merchandise  Marks. 
— International  Exhibitions. 

Sub  Depts.      J  — Commercial  Intelligence  Branch, 
t,  •  — Exhibitions  Branch. 

— Labour  Questions  generally. 
/  — Labour  Gazette. 

— Census  of  Production. 

— Labour  and  Production  Statistics. 

—Immigration  and  Emigration  Statistics,  etc. 

— Statistical  Monographs. 

— Wages  Statistics  and  Reports. 
/  — Prices  Statistics. 
Labour  Dept.  ^  —Trade  Union  Statistics  and  Reports. 
*  — Strike  Statistics  and  Reports. 

— Abstract  of  Labour  Statistics. 

— Abstract  of  Foreign  Labour  Statistics. 

— Co-operation  Statistics. 

— Labour  Exchanges. 

— Unemployment  Insurance. 

— Trade  Boards. 

— Cost  of  Living. 


THE  BOARD  OF  TRADE 


139 


»<  -fl 


< 


Sub  Depts. 


H 
Z 

IS 

< 

Q 

u 

< 
7. 


A 


Finance 
Dept. 


{  — Census  of  Production  Branch. 
— Labour    Exchanges    and    Unemployment    In- 
surance Branch. 
— ^Trade  Boards  Branch. 

— Estimates  for  the  Votes. 

— Estimates  and  Accts.  of  Lighthouses  Abroad* 

Lighthouse    Bds.,  Harbours,  etc.,  the  Vote 

for  Mercantile  Services. 
— Accounts  of  Trade  Boards  and  of   Exhibitions 

Branch. 
— Accounts  of   Consuls   and   Colonial   Shipping 

Masters. 
— Wages  and  Effects  of  Deceased  Seamen. 
— Wages  of  Seamen  left  behind  Abroad. 
— ^Seamen's  Money  Orders  and  Savings  Banks. 
— Seamen's  Temporary  Deposit  Banks. 
— Pensions — Merchant  Seamen's  Fund. 
— Greenwich  Hospital  Fund. 
— Lighthouse  Service. 
— Wrecks  and  Salvage  Accounts. 
— ^Accoimts  of  Transmission  of  Seamen's  Wages. 
— Expenses  of  Surveyors  and  Recovery  of  Fees 

from  Owners. 
— Expenses  of  Inquiries  and  Prosecutions. 
— Expenses    of    Relief    of    Distressed    Seamen 

Abroad  and   Recovery   from   Owners. 
— Bankruptcy  Estates  Accoimt. 
— Companies  Liquidation  Account. 
\ — Light  Dues  on  Shipping. 
— Lighthouse  Stores. 

In  addition  there  are  the  chief  Industrial  Commissioner's  Department 
concerned  with  Labour  Disputes,  the  Bankruptcy  Department,  the 
Solicitors'  Department,  the  Establishment  Department,  and  the 
Patents,  Designs  and  Trade  Marks  Office. 

The  case  for  a  Ministry  of  Industry  and  Commerce,  if 
properly  constituted  and  built  upon  a  basis  of  representative 
Trade  Councils,  was  a  strong  one  before  the  war.  It  is 
to-day  unanswerable.  The  problem  arising  from  the 
transition  from  war  to  peace,  the  transition  from  State 
control  under  e^nergency  legislation  to  less  restricted 
conditions,  are  so  complicated  and  present  such  novel 
aspects  that  no  existing  Government  Department  is  capable 
of  solving  them,  and  when  these  are  all  settled,  the  further 
problems  of  promoting  and  increasing  our  trade  to  keep 
pace  with  the  efforts  of  competitors  and  the  general  pro- 
gress of  the  world,  will  more  than  justify  the  establishment 
of  such  a  Ministry. 


\\ 


OUTPUT 


141 


CHAPTER  XIV. 

OUTPUT. 

The  foundation  of  industrial  prosperity  is  produc- 
tion.    The  material  well  being  of  a  nation  demands  : 
First,  the  attainment  of  the  possible  maximum, 
both  as  regards  size  and  quahty  of  output, 
whether  of  goods  or  services. 
Secondly,  the  elimination  of  all  waste  of  material 

or  effort  in  the  process  of  production. 
Thirdly,  an  equitable  division  of  the  proceeds  of 
industry,  enabling  all  those  concerned  in  the 
creation  of  wealth  to  obtain  a  reasonable 
share  of  its  material  benefits. 
My  contention  is  that  we  shall  never  reach  the 
possible  maximum  in  output  until  we  have  exhausted 
every  device  of  organisation. 

This  question  of  output  is  already  an  extremely 
urgent  one,  and  in  the  future  will  assume  far  greater 
importance.  Our  position  in  relation  to  our  com- 
petitors had  become  serious  even  before  the  war. 
Figures  which  have  been  prepared  by  Mr.  Charles 
Lancaster  are  typical  of  many  that  could  be  given 
to  show  the  necessity  for  a  radical  alteration  in 

140 


our  point  of  view  on  this  vital  matter  of  output. 
Labour  and  Capital  are  equally  at  fault,  and  both 
will  suffer  unless  great  changes  are  made. 

The  following  is  a  Report  prepared  for  the  Liver- 
pool Chamber  of  Commerce  by  Mr.  Lancaster : — 

'*  Whatever  arrangements  are  made  for  conduct 
of  British  trade  after  the  war,  one  thing  is  absolutely 
certain,  and  that  is  that  the  output  of  manufacturers 
of  all  kinds  in  this  country  will  have  to  be  increased 
to  an  extent  undreamed  of  by  our  manufacturers 
and  trade  unionists.  The  chief  competitor  of  the 
United  Kingdom  in  the  future  will  not  be  Germany, 
but  the  United  States  of  America.  Few  will  doubt 
this  who  have  devoted  any  attention  to  the  matter 
of  the  manufacturing  efficiency  of  the  two  countries. 

"  I  will  illustrate  by  quoting  from  the  first  Census 
of  Production  in  this  country  published  by  our 
Board  of  Trade  relating  to  the  year  1907,  and  con- 
trast a  few  points  with  the  American  Census  of 
Production  for  1909.  I  cite  five  important  indus- 
tries in  each  country — viz.,  boots  and  shoes,  card- 
board boxes,  butter  and  cheese,  cement,  and  the 
clothing  industry.  To  compare  the  relative  effi- 
ciency of  the  two  countries  let  us  compare  the  horse- 
power used  for  1,000  men  and  also  compare  the 
value  of  the  product  per  wage-earner.  Such  a 
comparison  reveals  the  fact  that  per  1,000  wage- 
earners  the  British  boot  and  shoe  industry  employed 
172  horse-powers  only,  and  the  United  States  486 
horse-powers.  In  making  cardboard  boxes  here 
we  employed  114  horse-powers  per  1,000  workers. 


\1 

^1 


142        THE  TRADE  OF  TO-MORROW 

and  the  United  States  590  horse-powers  per  1,000 
workers.  In  butter  and  cheese  we  employed  1-477 
horse-powers  per  1,000  workers,  and  the  United 
States  employed  5507  horse-powers  per  1,000 
workers.  Cement  here  employed  3-195  horse-powers 
per  1,000  workers,  and  the  United  States  13-875 
horse-powers.  Clothing  industries  here  used  45  horse- 
powers per  1,000  workers  against  165  horse-powers  in 
America.  In  these  five  industries  the  horse-power 
was  from  three  to  four  times  as  great  in  the  United 
States  as  in  the  United  Kingdom.  The  plain 
meaning  of  this  is  that  every  American  worker 
turns  out  from  three  to  four  times  as  much  as  his 
British  competitor. 

"  Then  if  we  compare  the  value  of  production  per 
man  in  each  country  we  find  the  output  of  1,000 
men  confirmed  as  to  the  value  of  that  output. 
The  value  produced  in  the  United  Kingdom  by 
each  worker  in  the  boot  and  shoe  industry  per  year 
was  £171.  In  America  £516.  In  cardboard  boxes 
£106  here  and  £275  in  America.  In  butter  and 
cheese  here  £1,310  and  £2,979  in  America.  In 
cement  £192  per  year  and  £472  in  America.  In 
clothmg  mdustries  £158  and  £484  in  America. 

"  The  five  industries  named  are  typical  of  nume- 
rous others.  In  most  comparable  cases  we  find  that 
machinery  per  1,000  workers  is  about  three  times 
as  powerful  in  America  as  it  is  here,  and  that  output 
per  worker  is  about  three  times  as  great. 

"  British  industrial  output  can  be  doubled  and 
trebled,  but  neither  capitalists  or  workers  have  yet 


OUTPUT 


143 


tackled  this  increased  production  by  employing 
labour-saving  machinery.  Indeed  the  efforts  of  too 
many  British  workmen  and  their  leaders  have  been 
directed  to  limiting  production  absolutely  regard- 
less of  the  natural  economic  law  that  the  greater 
the  number  of  units  of  production  the  smaller  is 
the  cost  per  unit,  because  the  fixed  charges,  necessary 
to  incur  whether  output  be  small  or  large,  are  spread 
over  a  greater  number  of  units  produced,  thus  reduc- 
ing the  cost  of  each  unit.  In  America  the  greater 
production  per  man  leads  to  greater  consumption 
per  man,  that  is,  to  his  prosperity. 

"  Now  I  do  not  propose  to  dwell  on  this  phase. 
I  only  say  that  the  inaptitude  and  ignorance  of 
many  manufacturers  and  their  workmen  here  are 
directly  accountable  for  the  lack  of  efficiency  we 
as  a  manufacturing  nation  display  in  many  direc- 
tions. 

"  We  are  as  unprepared  for  the  commercial  war, 
which  will  follow  the  close  of  the  mihtary  war,  as 
we  were  for  the  military  war  itself.  In  the  latter, 
a  miracle  has  been  worked — and  millions  of  men  and 
thousands  of  millions  of  money  have  been  raised. 

"  But  we  cannot  expect  a  similar  miracle  to  be 
worked  in  the  manufacturing  industries  upon  which 
the  life  of  a  nation — that  is,  its  export  trade — 
depends.  Much  ground  will  have  to  be  broken, 
and  much  missionary  work  undertaken,  before  any 
progress  can  be  expected,  even  in  preparing  for 
fuller  discussion,  but  it  is  not  too  soon  to  enlist 
earnest  thought — with  a  view  to  action  later  on." 


144        THE  TRADE  OF  TO-MORROW 


0 


Dr.  Dugald  Clerk,  in  the  Annual  Address  to  the 
Royal  Society  of  Arts,  puts  the  same  point  in 
another  way  : — 

"  It  is  a  remarkable  fact  that  the  United  States 
of  America,  with  its  loo  millions  of  population, 
is  adequately  served  as  to  its  industrial  needs  by 
835  millions  of  workers,  while  we  require  824 
millions  to  supply  the  needs  of  437  millions." 

Mr.  Charles  Lancaster  has  made  another  valuable 
contribution  to  the  same  discussion  in  an  article 
in  The  Times  Trade  Supplefnent  of  January,  1917, 
where  he  deals  with  the  output  of  coal  and  shows 
how  the  tendency  of  the  United  Kingdom  has  been 
steadily  downward,  while  that  in  other  parts  of 
the  world  has  been  to  increase. 

"  During  the  twenty-five  years  ending  1912,  the 
number  of  tons  of  coal  produced  per  annum  per 
person  employed  in  the  industry  in  the  United  King- 
dom fell  every  year  from  312  tons  in  1887  to  244 
tons  in  1912.  In  the  United  States  it  increased 
every  year  from  400  tons  in  1887  to  660  tons  in  1912. 
In  AustraHa  it  increased  from  333  tons  to  542  tons, 
in  New  Zealand  from  359  tons  to  503  tons,  and  in 
Canada  from  341  tons  to  472  tons.  In  other  words, 
the  number  of  tons  of  coal  produced  per  coal  worker 
per  annum  is  nearly  twice  as  large  in  Australia, 
New  Zealand,  and  Canada  as  it  is  in  the  United 
Kingdom,  and  nearly  three  times  as  much  in  the 
United  States  of  America  as  in  the  United  Kingdom. 

"  No  doubt  the  coal  seams  in  America  lie  nearer 


OUTPUT 


145 


the  surface  and  are  of  larger  dimensions.    Also 
the  '  adits  '  allowing  rail  haulage  up  hill  to  the  pit- 
mouth  largely  replace  the  deep  shafts  in  our  own 
country.     But,    after   making    full    aUowance    for 
these  things,  the  British  miner  has  a  good  deal  to 
account  for.      A  study  of  the  coal  tables  of  1912 
will  demonstrate  the  ominous  reduction  per  man  of 
coal-getting  and  the  increase  in  price  per  ton  at  the 
pit-mouth  in  the  United  Kingdom  from  45.  lod  in 
1886  to  gs.  ofi.  per  ton  in  1912.    Also  the  decrease 
in  pnce  in  the  United  States  of  America  from  6s  Aid 
per  ton  at  the  pit-mouth  to  6s.  id.,  and  the  decrease 
in  Austraha  from  9s.  2d.  to  7s.  6\d.    In  New  Zealand 
the  pnce  remained  in  1912  about  the  same  as  in 
1887,  VIZ.,  los.  lod.  per  ton,  although  wages  have 
been  periodically  increased  in  all  countries  men- 
tioned." 


This  is  not  a  matter  of  tariffs  ;  it  is  not  a  matter 
of  wages  or  profits  :  it  is  solely  and  simply  a  question 
of  orgamsation  and  the  "  will-to-produce." 

But  in  securing  maximum  output  it  is  not  only 
essential  to  employ  the  best  machines,  and  to  see 
that  the  energies  of  every  worker  are  utilised  to 
the  best  advantage.  It  is  also  necessary  to  see  that 
every  factory  in  an  industry  is  employed  upon  the 
particular  class  of  work  which  it  can  best  perform. 

This  point  can  be  iUustrated  from  practical  experi- 
ence by  taking  any  industry  and  examining  closely 
Its  methods  of  procedure.  The  furniture  trade  as  at 
present  carried  on  in  this  country  will  serve  our 

K 


I 


.-fl 


146        THE  TRADE  OF  TO-MORROW 

purpose.  This  trade  is  useful  as  an  illustration 
because  something  has  already  been  done  along 
lines  which  must  be  followed  a  great  deal  farther 
before  the  maximum  output  is  reached. 

Many  years  ago  English  furniture  was  almost 
entirely  made  by  small  "  garret  masters,"  who  sold 
their  wares  to  wholesale  merchant  houses.  The 
extravagance  of  making  each  piece  of  furniture 
separately  and  by  hand  began  to  be  realised  about 
thirty  years  ago,  and  since  then  great  factories  have 
sprung  up  in  different  parts  of  the  kingdom,  and 
machine-made  furniture  has  largely  taken  the  place 
of  the  hand-made  goods  with  which  our  fathers  were 
content.  The  result  has,  of  course,  been  greatly 
to  cheapen  furniture  generally,  and  to  raise  the 
standard  of  comfort  in  the  homes  of  the  people  to  a 
point  that  would  have  been  considered  unthinkable 
a  quarter  of  a  century  ago. 

But  even  with  this  tremendous  advance  the  possi- 
biHties  of  improvement  have  not  been  explored  to 
anything  like  the  maximum  extent.  An  inspection 
of  the  catalogues  of  the  leading  furniture  manu- 
facturers would  show  that  each  of  them  is  attempt- 
ing to  make  almost  every  class  of  furniture.  The 
aim  in  each  case  is  to  put  on  the  market  a  complete 
range  of  goods  which  shall  include  everything  that 
is  required  for  the  furnishing  of  the  cottage  or  the 
mansion. 

Turning  for  a  moment  to  America,  the  fashion 
there  is  found  to  be  entirely  different.  Huge 
factories  at  Grand  Rapids   and   elsewhere  confine 


OUTPUT 


147 


the  whole  of  their  energies  and  attention  to  one  line 
—chairs,  desks,  or  carcase  work.  It  is  extremely  rare 
to  find  a  desk  firm  touching  upholstery.  The 
American  does  not  aim  at  covering  the  whole  of  his 
trade.  His  ambition  takes  a  different  form  and  is 
summed  up  in  the  one  word  "  carload." 

If  it  were  possible  to  reorganise  the  EngHsh  furni- 
ture trade,  and  to  divide  up  the  different  articles 
made  between  the  different  firms  engaged,  so  that 
the  whole  of  the  energies  of  one  big  factory  could 
be  devoted  to  one  class  of  work,  the  result  must 
be  greatly  to  increase  output  and  to  minimise  cost. 
;  But  this  does  not  by  any  means  exhaust  the 
catalogue  of  advantages  that  would  accrue  from 
such  an  arrangement.  Another  result  that  would 
constitute  an  enormous  saving  would  take  the  form 
of  a  reduction  of  stocks.  In  the  ordinary  way  all 
these  furniture  houses  hold  big  stocks  of  hundreds 
of  different  articles.  Thus  it  comes  about  that  some 
common  pattern  of  cheap  bedroom  chair  will  be 
in  stock  at  fifty  different  places,  and  a  vast  amount 
of  capital  locked  up  in  that  one  line. 

Another  result  of  the  ideal  arrangement  which 
we  are  here  debating  would  be  a  great  reduction  in 
the  amount  of  machinery  employed  for  a  given  out- 
put. The  present  method  involves  the  employment 
of  expensive  machinery  on  short  runs  and  the  waste 
of  much  valuable  time  in  altering  and  adjusting 
that  machinery  to  the  next  j  ob.  If  the  wood- working 
plant  of  the  country  could  be  kept  going  in  the  same 
way  that  the  shell-making  plant  is  now  employed, 


ff 


"% 


148        THE  TRADE  OF  TO-MORROW 

and  each  machine  be  continually  occupied  with 
one  process,  the  saving  in  machine  time  and  expense 
would  represent  a  very  substantial  difference  in  the 
price  of  the  finished  article. 

For  these  and  similar  reasons  the  capital  employed 
for  a  given  output  in  furniture  is  a  great  deal  more 
than  is  necessary.  The  locking  up  of  money  in  this 
way  may  partly  explain  why  the  British  manufacturer 
finds  it  difficult  to  extend  that  credit  to  foreign 
buyers  which  is  stated  to  be  given  with  such  readi- 
ness by  German  traders. 

If  we  could  imagine  the  Enghsh  furniture  trade 
cartelised  as  it  would  be  in  Germany,  there  would  be 
formed  a  central  seUing  organisation  which  would 
cover  the  whole  world  much  more  efficiently  and 
with  considerably  fewer  persons  than  is  done  by 
the  present  individuahstic  and  competitive  method. 
That  selling  organisation  would  collect  all  the  orders 
and  allocate  them  to  different  works  according  to 
their  capacity.  The  works  would  then  be  classified 
for  special  operations  and  every  article  would  be 
produced  with  the  maximum  of  economy. 

It  is,  of  course,  not  suggested  here  that  we  should 
adopt  the  German  cartel  as  our  model,  but  it  is 
suggested  that  a  Trade  Coimcil,  possessing  certain 
statutory  powers  and  embodying  the  whole  trade, 
would  be  able  to  exercise  a  very  considerable 
influence  in  the  direction  of  the  economies  outhned 
above. 

The  orthodox  answer  to  any  such  suggestion  as 
this  is   found  in  the  two  words  "  Competition  " 


OUTPUT 


149 


and ' '  Consumer. "  It  is  argued  that  unless  you  allow 
absolutely  free  play  to  competition  you  place  the 
consumer  at  the  mercy  of  the  producer.  If  it  is 
true  that  there  is  no  way  of  bringing  about  these 
reforms  except  through  a  trust  or  cartel,  then  I 
should  be  inchned  to  agree,  but  if  it  is  possible  to 
set  up  a  system  of  State-controUed  associations  which 
while  ehminating  waste  shall  maintain  the  best 
features  of  the  individuahstic  plan,  then  I  think  this 
argument  falls  to  the  ground. 

There  is  a  branch  of  study  which  economists  seem 
to  me  to  have  neglected,  and  which  I  should  Hke 
to  see  further  explored.  It  is  to  discover  the  line 
beyond  which  competition  ceases  to  be  an  influence 
for  economy  and  becomes  an  expense.  It  is  obvious 
that  we  have  developed  the  competitive  system  to 
the  point  where  it  adds  very  greatly  to  the  cost  of 
most  of  the  articles  that  we  produce.  That  being 
so,  it  is  idle  to  talk  of  competition  as  a  protection 
for  the  consumer. 

The  managing  director  of  one  of  the  largest  iron 
foundries  in  the  country,  discussing  this  subject  with 
me  recently,  put  the  possibihties  of  output  higher 
than  I  should  have  ventured  to  go.  His  company  is 
engaged  in  the  production  of  probably  a  thousand 
different  articles,  a  range  of  fines  necessary  to  the 
company  to  keep  its  place  under  our  present  system 
of  competition.  This  expert  assured  me  that  if 
his  foundry  could  be  employed  exclusively  upon  the 
production  of  rain-water  pipes,  he  had  the  facihties, 
the  labour,  and  the  room  to  turn  out  twice  the 


150        THE  TRADE  OF  TO-MORROW 

present  total  production  of  the  United  Kingdom. 
If  the  matter  could  be  carried  one  stage  further, 
and  it  could  be  arranged  that  these  works  were  con- 
fined to  the  production  of  one  size  of  one  pattern 
of  rain-water  pipes,  I  was  assured  that  it  could 
produce  five  times  the  total  output  of  the  country 
under  the  present  system.  Such  a  scheme  as  this 
would  amoimt  to  the  appHcation  of  the  munition 
method  to  every  trade  ;  the  sub-division  of  goods 
and  the  sub-division  of  operations,  the  classifying 
of  works  and  the  allocation  to  each  of  that  part  of 
the  product  which  it  was  best  fitted  to  produce. 

"  The  day  of  conservative  and  scattered  individual 
effort  is  over— it  leads  to  certain  ruin,"  says  the 
Daily  Telegraph,  "  Success  Hes  only  in  concentra- 
tion by  collective  effort  and  the  pooling  of  individual 
interests  for  the  common  good.  The  industrial 
problems  of  the  future  must  be  faced,  and  faced 
quickly— moreover,  they  must  be  solved,  and  solved 
quickly.  The  onus  of  responsibility  falls  primarily 
on  capital,  in  the  provision  of  standardised  organisa- 
tion, direction,  and  equipment,  whereby  the  best  is 
accurately  determined  and  the  best  is  progressively 
maintained  :  thereafter  capital  and  labour  must  co- 
operate in  standardising  rapid  production,  so  that 
good  general  trade  may  be  promoted  by  steady 
employment  at  high  wages  to  the  lasting  benefit 
of  the  industries  concerned  and  the  general  welfare 
of  the  entire  community." 

It  is  perfectly  obvious  that  if  we  are  to  hold  our 
position  as  leaders  in  the  commercial  world  we  must 


OUTPUT 


151 


find  some  system  of  co-operation  between  producers 
so  that  overlapping  of  effort  may  be  prevented, 
internal  competition  ehminated,  and,  by  the  careful 
allocation  of  production  among  works  in  accordance 
with  their  experience  and  plant  capacity,  effective 
competition  made  possible  in  foreign  markets."'^  r: 

If  only  we  could  reach  the  point  where  we  could 
begin  the  study  of  each  trade  as  a  whole  as  a  national 
asset,  regarding  its  work  as  a  national  interest, 
and  we  could  contrive  to  get  both  labour  and  capital 
to  devote  themselves  to  this  study,  I  feel  sure  that 
a  great  deal  could  be  done  towards  the  increase  of 
our  output,  which  would,  of  course,  mean  the  capture 
of  foreign  markets,  the  reduction  of  price,  and  more 
commodities  for  everybody,  more  real  wealth,  which 
is  exactly  the  same  thing  as  either  an  increase  in  wages 
or  an  increase  in  profits,  and  ought  to  bring  both. 

In  the  past,  so  far  from  studying  the  possibilities 
of  increasing  output,  the  tendency  has  been  deUber- 
ately  to  restrict  output.  We  have  heard  a  great 
deal  in  the  last  few  years  about  the  limitation  of 
output  on  the  part  of  the  trade  unions.  The  iniqui- 
ties of  the  system  known  as  "  csl'  canny  "  are,  in 
my  mind,  no  worse  than  the  iniquities  of  the  stupid 
competitive  system  which  forces  every  manufacturer 
to  attempt  to  cover  the  whole  of  his  trade  and  thus 
waste  half  of  his  energies. 

To  give  effect  to  the  undoubted  need  for  a  great 
increase  m  the  output  of  our  industries,  the  willing 
consent  of  both  capital  and  labour  is  essential,  but 
something   more    than    consent  will  be  wanted  if 


152        THE  TRADE  OF  TO-MORROW 

anything  practical  is  to  be  done.  The  problem 
requires  to  be  studied  by  the  organisations  of  both 
parties  to  industry,  and  both  will  have  to  assume 
responsibiUties  with  regard  to  it.  First  of  all 
the  employer  will  have  to  demonstrate  beyond  any 
question  of  doubt  that  he  is  capable  of  finding  a 
satisfactory  market  for  the  increased  output  if 
labour  consents  to  do  its  part.  The  restriction  of 
output  on  the  part  of  trade  unions  has  been  and  is 
justified  by  the  fear,  often  well  founded,  that  no 
proper  organisation  existed  to  prevent  gluts  and 
consequent  unemployment. 

It  would,  therefore,  seem  that  the  first  essential 
is  the  estabUshment  by  manufacturers  of  adequate 
selling  arrangements  abroad,  and  this  can  only 
be  done  upon  a  co-operative  basis.  Employers 
generally,  are  fully  alive  to  this  side  of  the  problem' 
and  the  only  means  at  present  open  to  them  of  over- 
coming its  difficulties  is  to  combine  in  the  form  of  a 
trust.  Voluntary  associations  are  quite  helpless  in 
the  matter,  and  this  part  of  the  case  provides  the 
strongest  argument  for  State  action  in  the  setting 
up  of  Trade  Councils  with  power  to  tackle  the 
problems  of  export  on  behalf  of  the  whole  trade. 

From  the  man's  point  of  view  there  are  two  or 
three  considerations  which  will  weigh  with  him 
when  he  is  asked  to  forego  the  system  of  "  ca'  canny," 
which  has  been  so  laboriously  and  carefuUy  built 
up  in  this  country.  It  should,  I  think,  be  more 
generally  known  that  this  system  is  peculiar  to 
Great  Bntain,  and  if  an  appeal  were  made  to  the 


OUTPUT 


153 


patriotism  of  the  working  classes  and  it  were  shown 
that  their  prosperity  depended  upon  competition 
with  great  industrial  countries  where  no  such  scheme 
was  in  operation,  a  different  point  of  view  with 
regard  to  it  might  prevail. 

Some  readers  may  remember  the  great  strike  in 
the  building  trades  in  Chicago,  which  was  one  of 
the  worst  that  America  has  experienced  in  recent 
years.  The  basis  of  this  strike  was  a  demand  on 
the  part  of  the  workers  for  the  right  to  enforce  restric- 
tion of  output.  It  did  not  succeed,  but  it  did  great 
damage  to  the  trade  of  Chicago.  As  a  result  of  it, 
the  United  States  Government  appointed  the  late 
Carroll  D.  Wright,  who  was  at  that  time  Commis- 
sioner of  Labour,  to  undertake  an  investigation  as 
to  the  extent  to  which  restriction  of  output  was  in 
force  throughout  the  world.  Mr.  Wright  reported, 
after  the  most  exhaustive  inquiries,  that  restriction 
of  output  or  what  was  known  as  the  "  ca'  canny  " 
poHcy  had  obtained  but  shght  foothold  in  America, 
or,  in  fact,  in  any  other  country  except  in  England. 
England  was  the  place  where  the  idea  had  originated 
and  the  only  place  where  it  was  in  full  effect  in 
many  important  trades. 

The  report  of  the  investigators  of  the  United 
States  at  this  time  is  worth  study  by  those  who  are 
interested  in  this  problem. 

The  next  consideration  that  should  be  impressed 
upon  labour  is  the  undoubted  fact  that,  all  over 
the  world,  wages  are  highest  where  there  is  the 
greatest  amount  of  power  and  machinery  in  use, 


^ 


"W^ 


liil 


154        THE  TRADE  OF  TO-MORROM' 

and  where  output  is  at  its  maximum.  The  lowest 
wages  in  the  world  are  paid  in  China.  The  Chinese 
are  a  people  of  an  industrious,  clever,  and  intelligent 
type,  yet  they  work  entirely  by  hand  for  a  wage 
which  is  represented  by  onlyTa  few  pence  a  day. 
The  highest  wages  in  the  worid  are  paid  in  America, 
where  more  machinery  is  used  per  worker  than  in 
any  other  country. 

When  labour  has  been  assured  that  unlimited 
production  is  free  from  the  old  risks  of  gluts  and 
unemployment,  and  when  it  has  been  proved  that 
high  production  and  the  latest  machinery  mean 
high  wages,  something  else  will  still  be  necessary 
before  it  will  consent  to  forego  what  it  regards  as 
its  privileges  in  these  matters.  Labour  will  not 
accept  these  conclusions  from  capital  or  from  any 
other  authority.  It  must  find  these  facts  out  for 
itself.  It  must  be  satisfied  that  this  is  not  some 
capitaHstic  scheme  with  the  sole  object  of  increasing 
profits.  It  must  be  satisfied  that  increased  output 
is  really  in  the  interests  of  humanity  and  civiH- 
sation,  and  in  the  interests  of  its  own  class.  That 
satisfaction  can  only  come  from  a  larger  participation 
on  the  part  of  labour  in  the  problems  of  industry. 
If  labour  were  given  an  equal  place  with  capital 
on  Trade  Councils,  and  made  to  share  the  responsi- 
bilities for  the  welfare  of  each  of  our  national  indus- 
tries, it  would  come  to  see  that  wages  and  profits 
are  really  only  minor  parts  of  the  problem,  and  all 
the  economic  follies  of  the  pre-war  labour  policy 
would  die  a  natural  death. 


CHAPTER  XV. 

EDUCATION  AND  RESEARCH. 

The  two  great  questions  of  Education  and  the 
Application  of  Science  to  Industry  will  never  be 
satisfactorily  settled  until  trade  is  organised.  We 
spend  on  both  subjects  a  great  deal  of  money,  but 
we  fail  to  get  value  for  our  money  because,  true  to 
our  traditions  and  characteristics,  we  persist  in 
performing  this  work  in  scattered  and  spasmodic 
efforts  without  any  real  plan.  The  result  is  a  great 
deal  of  overlapping  and  waste. 

When  we  have  succeeded  in  getting  our  industries 
organised,  and  when  we  have  a  Tirade  Council  or 
some  similar  authority  to  study,  promote,  and  control 
each  industry,  those  Councils  will,  of  course,  turn 
their  attention  to  the  subject  of  Education. 
f\  From  the  trade  point  of  view  there  are  several 
rough  divisions  into  which  education  can  be  classi- 
fied. The  relation  between  trade  and  elementary 
education  is  not  very  apparent,  and  it  is  not  easy  to 
see  what  influence  a  Trade  Council  could  have  upon 
the  conduct  of  elementary  schools.  It  is  neverthe- 
less the  fact  that  the  great  majority  of  the  children 

155 


156        THE  TRADE  OF  TO-MORROW 

who  attend  these  schools  are  destined  for  some 
form  of  industrial  activity,  and  there  is  a  very  great 
deal  that  could  be  done  in  the  elementary  stages  to 
interest  the  child  in  these  matters. 

There  is,  of  course,  no  suggestion  here  that  elemen- 
tary education  should  be  specialised  or  that  children 
should  be  taught  trades.    But  a  great  deal  could 
be  done,  and  ought  to  be  done,  to  direct  the  infant 
mind  to  a  proper  view  of  industry.    The  boy  of  ten 
sets  before  himself  a  model  of  a  man,  and  aU  too 
frequently  that  model  takes  the  form  of  a  pohce- 
man,  or  a  sailor,  or  a  Dick  Turpin,  or  some  modem 
cinema  hero,  and  it  never  dawns  upon  him  that 
there  is  any  romance,   any  dignity,   or  any  real 
interest  in  other  forms  of  manly  activity.     With 
my  own  boys  I  have  made  it  a  regular  practice,  one 
day  in  each  holidays,  to  visit  some  factory  and  allow 
them  to  investigate  manufacturing  machinery  and 
processes  in  their  own  way. 

When  we  come  to  the  secondary  and  technical 
schools,  the  interest  of  industry  becomes  more 
obvious.  It  is  an  admitted  blunder  that  we  are 
spending  great  sums  of  money  in  this  branch  of 
education  on  the  strength  of  the  opinions  of  educa- 
tionists, without  any  regard,  or  with  hardly  any 
regard,  to  the  views  of  the  trades  concerned.  The 
lack  of  a  hnk  between  a  trade  and  its  trade  school  is 
felt  very  keenly  by  those  who  are  responsible  for 
the  latter,  but  they  are  quite  helpless  in  the  matter 
so  long  as  trade  remains  in  its  present  chaotic  condi- 
tion.    When  a  skilled  trader  does  go  out  of  his  way 


EDUCATION  AND  RESEARCH 


157 


to  take  an  interest  in  a  trade  school  he  always  finds 
himself  heartily  welcomed  by  the  authorities  and 
the  instructors,  but  occasional  outbursts  of  individual 
interest  cannot  compensate  for  the  lack  of  any 
official  concern  on  the  part  of  a  trade  for  the  edu- 
cation of  the  students  who  have  elected  to  follow 
that  trade  as  a  career. 

One  is  often  struck  with  the  fact  that  the  boy  of 
thirteen  or  fourteen  becomes  bored  with  school  and 
determines  to  get  out  into  the  world  and  earn  his 
Hving.  This  is  not  entirely  a  matter  of  pounds, 
shillings,  and  pence,  although  the  prospect  of  wages 
has  undoubtedly  something  to  do  with  it.  The  boy 
will  generally  tell  you  that  he  is  fed  up  with  schooling 
and  wants  to  get  into  a  more  serious  world.  It  has 
never  dawned  upon  him  that  there  is  any  connection 
between  his  education  and  his  later  work :  for  the 
present  system  has  failed  to  link  up  academic 
theories  with  their  practical  application.  The  lad 
does  not  understand  the  meaning  of  that  which 
he  has  to  study.  A  proper  system  of  co-operation 
between  industry  and  education  would  find  a  way  of 
altering  his  point  of  view. 

It  is  fortunately  imnecessary  to  debate  at  any 
length  the  need  for  improvement  in  our  educational 
system,  because  there  is  no  doubt  that  great  improve- 
ments will  be  made.  The  only  point  that  need 
occupy  us  here  is  that  those  improvements  will  be 
far  more  effective,  far  more  practical,  and  have  a 
much  better  chance  of  success,  if  they  are  made  with 
the  advice  and  assistance  of  those  who  are  engaged 


iflii 


V 


158        THE  TRADE  OF   TO-MORROW 

in  the  practical  side  of  industry.  The  Trade 
Council  in  each  trade  would  be  able  to  exercise  an 
enormous  influence  for  good  in  this  matter. 

The  subject  of  education,  however,  as  it  concerns 
the  welfare  of  an  industry  is  not  exhausted  when 
proper  arrangements  have  been  made  for  the  young 
The  Trade  Council  would  have  an  even  more  difficult 
problem  to  tackle  in  connection  with  the  education 
of  those  actually  engaged  in  its  trade.  Development 
along  these  lines  would  involve  the  constant  diffusion 
of  knowledge  as  to  trade  customs  and  practices  in 
other  countries,  apart  altogether  from  much  neces- 
sary  work  m  educating  both  employers  and  employed 
m  the  pnnciples  of  industrial  economics,  and  the 
aims  and  aspirations  of  the  industry  in  which  they 
were  engaged.  ^ 

Next,  the  public  has  to  be  educated.  A  healthy 
trade,  developed  to  its  fullest  extent,  is  impossible 
without  a  sympathetic  pubUc  opinion  behind  it 
This  is  a  branch  of  work  that  has  never  been  studied 
in  the  past,  and  cannot  be  studied  so  long  as  a  trade 
is  composed  merely  of  disconnected  individuals. 

The  possibihties  of  education  will  expand  indefi- 
nitely when  labour  begins  to  take  an  interest  in 
them,  and  if  ever  the  ideal  is  reached,  we  shall  all 
be  engaged  in  educating  ourselves  and  one  another 
throughout  our  careers.  Maximum  output,  elimina- 
tion of  waste,  the  perfection  of  the  product,  and  all 
the  ideals  which  we  should  keep  constantly  before 
us,  are  not  to  be  attained  without  the  true  educa- 
tional spirit. 


EDUCATION  AND  RESEARCH 


159 


Labour  from  the  lowest  to  the  highest  grades 
always  requires  more  education.  An  examination 
of  the  present  position,  a  walk  through  any  factory, 
will  show  this  to  be  so.  A  mechanic  will  be  found 
reading  drawings,  and  managing  somehow  to  do  his 
work  from  the  rough  and  ready  knowledge  of  draw- 
ings that  he  has  picked  up  in  the  course  of  his 
apprenticeship.  That  mechanic  would  read  those 
drawings  with  far  more  interest,  and  his  work  would 
be  better,  if  he  had  had  an  opportunity  of  going 
through  a  course  of  draughtsmanship.  An  operator 
will  be  found  working  a  lathe,  and  by  the  rule,  the 
reason  for  which  is  quite  unknown  to  him,  he  will 
have  his  cutting  tool  clamped  near  to  the  cutting 
edge.  If  he  had  been  given  the  opportunity  of 
studying  the  elementary  principles  of  mechanics, 
and  had  learned  the  rule  of  the  lever,  the  reason 
for  the  particular  way  in  which  he  has  to  adjust 
his  machine  would  be  obvious  to  him,  and  his  work, 
instead  of  being  drudgery,  would  be  a  matter  of 
scientific  interest.  An  engineering  draughtsman,  who 
now  drags  out  a  weary  existence  with  a  pen  and  ruler 
and  tracing  paper,  would  stand  a  better  chance  of 
advancement,  and  his  drawings  would  be  improved, 
if  he  had  been  able,  during  the  period  of  his  educa- 
tion, to  see  something  of  the  practical  side  of  the 
work  that  he  was  doomed  to  draw  for  the  rest  of  his 
life.  The  shop  manager  has  probably  been  selected 
because  of  his  abiUty  in  the  management  of  men, 
an  ability  which  is  natural  to  him  and  which  has 
not  been  acquired  at  any  school.     That  manager 


i 


.   il 


;l| 


1 


,1  ■ 

M 

i 
I 


i6o        THE  TRADE  OF  TO-MORROW 

would  manage  far  better  if  he  had  a  greater  know- 
ledge of  the  scientific  side  of  the  work  that  came 
under  his  control. 

In  short,  the  linking  up  of  the  educationist  and 
the  trader  and  the  joint  control  by  them  of  industrial 
education  would  result  in  an  alteration  in  the  point 
of  view  of  most  of  the  people  engaged  in  industry 
and  add  very  materiaUy  to  their  interest  in  the  work 
m  which  they  were  engaged.     Labour  unrest  would 
not  be  so  prevalent  if  every  labourer  had  the  educa- 
tion which  would  enable  him  to  see  the  true  purpose 
of  the  work  he  was  doing,  instead  of  regarding  him- 
self.^as  he  frequently  does  at  the  moment,  as  a  sort 
of  automatic  machine  in  which  nobody  has  anv 
interest.  ^ 

The  improvement   of  our  industrial   education 
does  not  necessarily  mean  a  great  addition  to  our 
expenses.    There  will,  of  course,  always  be  a  demand 
for  more  money  for  education,  and  it  is  right  that 
It  should  be  so,  but  if  we  were  content  to  spend  only 
the  same  amount  of  money  and  were  to  bring  our 
arrangements  a  httle  more  into  hne  with  practical 
reqmrements,  great  improvements  would  result 
.^:^A  few  examples  will  make  this  point  clear     There 
are  thirty-eight  schools  which  were   recognised  by 
the  Board  of  Education  in  1908  for  the  teaching  of 
cotton  spinning.    There  were  at  the  same  time  some 
dozens  of  trade  organisations,  societies,  and  unions 
mteresting  themselves  in  cotton  spinning,  and  yet 
inqmry  shows  that  these  trade  organisations  do 
not  appear  to  take  any  action  as  regards  the  educa- 


EDUCATION  AND  RESEARCH        161 

tional  training  of  persons  engaged  in  the  industry. 
In  cotton  weaving  there  are  thirty-five  schools, 
and  the  same  remark  applies.  In  engineering  the 
case  is  even  worse.  The  Board  of  Education  has 
approved  or  authorised  over  eighty  schools  where 
engineering  is  taught,  and  to  these  must  be  added  a 
great  number  of  institutions  which  do  not  seek  the 
assistance  of  the  Board.  In  engineering  there  are 
probably  twenty  Trade  Unions  and  a  large  number  of 
Employers'  Associations  and  Federations,  and  yet 
it  has  to  be  admitted  that  no  trade  organisation  has 
pursued  any  vigorous  action  relating  to  educational 
training.  Instances  are  to  be  found  where  local 
education  authorities  have  invited  engineering  asso- 
ciations or  trade  unions  to  nominate  one  or  more  of 
their  members  to  represent  them  on  advisory  com- 
mittees, but  this  is  not  the  result  of  any  system,  and 
is  the  full  extent  to  which  co-operation  between  the 
trade  and  education  has  gone. 

As  an  example  of  the  ramifications  of  the  Board 
of  Education  in  technical  training,  it  may  be  men- 
tioned that  there  are  no  less  than  twenty-one  schools 
which  receive  its  assistance  for  the  education  of 
boys  who  are  going  into  the  fishing  industry,  thus 
showing  that  there  is  no  lack  of  desire  on  the  part 
of  the  State  to  spend  money  in  trade  education, 
even  though  traders  themselves  take  no  interest 
in  the  matter. 

There  are  thirty  schools  teaching  wool  and  worsted 
spinning  and  .weaving  ;  sixty-eight  schools  where 
coal-mining  is  taught ;  thirty-three  give  instruction 


j'i'ii-.'i 


162        THE  TRADE  OF  TO-MORROW 

in  shipbuilding ;  122  are  available  to  the  boy  who 
desires  to  become  a  printer  ;  while  even  trades  like 
milhnery  and  upholstery  can  boast  fifty-five  and 
twenty-five  schools  respectively. 

Electrical  engineering  very  naturally  heads  the 
list  of  technical  schools,  with  a  total  of  169,  the 
reason  being  that  there  is  no  industry  in  which  the 
necessary  proportion  of  skilled  to  unskilled  workers 
IS   so  high.     The  lowest  grades   of  operatives  in 
electrical  work  must  of  necessity  have  some  know- 
ledge  of  the   principles    of    electricity.     A   close 
examination    of   these   schools    discloses    a   much 
greater   amount    of   interest    on   the   part  of  the 
individual  members  of  the  industry  in  the  training 
^ven,  but  very  little  organised  connection  between 
the  trade  and  training  seems  to  exist. 


Turning  to  the  subject  of  Scientific  Research, 
there  is  here  enormous  scope  for  the  activities  of 
the  Trade  Councils.  The  progress  of  any  industry 
depends  upon  the  continual  introduction  of  new 
knowledge.  This  is  a  fundamental  principle  which 
the  Bntish  manufacturer  has  always  failed  to  grasp 
The  neglect  of  science  by  British  industry  in  the 
past  IS  the  chief  reason  for  the  loss  of  many  valuable 
trades  to  more  progressive  countries. 

The  individual  manufacturer  is,  as  a  rule,  obliged 
to  keep  a  very  tight  grip  on  the  purse-strings  It 
IS  very  few  individual  concerns  which  can  afford 


EDUCATION  AND  RESEARCH        163 

to  spend  large  sums  of  money  unless  they  are  assured 
of   an    immediate    return.    Scientific    research    is 
absolutely  barred  by  any  such  restriction.     To  be 
of  any  real  service  it  involves  the  continual  spending 
of  money,   without  any  tangible  and  immediate 
return.    The  British  trader  works  upon  quotation  : 
he  will  not  place  an  order  until  he  has  got  a  price  : 
but,  unfortunately,  you  cannot  get  a  quotation  in 
advance  for  the  discovery  of  a  new  material  or  an 
improved  process.    Scientific  research  has,  therefore, 
had  to  be  left  in  this  country  to  universities  and 
other  institutions  that  can  afford  to  be  independent 
of  profit  and  loss.    Thus  we  find  a  large  amount  of 
research  work  in  progress,  research  which  has  a 
direct  bearing  upon  industry,  but  no  direct  connec- 
tion with  industry.     It  may  be  safely  stated  that 
much  useful  scientific  work  is  done  in  laboratories 
which  is  never  heard  of  by  the  men  who  could  turn 
it  to  practical  account. 

The  case  for  the  union  of  an  industry  for  the  pur- 
pose of  research  is  unanswerable,  and  if  Trade 
Councils  were  set  up  for  no  other  reason  than  to 
take  care  of  the  scientific  side  of  each  manufacture, 
they  would  be  amply  justified.  It  is,  fortunately, 
not  necessary  to  argue  this  matter,  because  the 
State  has  already  recognised  these  principles  and 
the  machinery  exists  for  carrying  them  into  effect. 

The  recently  established  Industrial  and  Scientific 
Research  Department,  the  outcome  of  the  Research 
Committee  of  the  Advisory  Council,  is  organised 
and  equipped  ready  for  the  service  of  our  trades. 


f'       '^ 


I  ''% 


164        THE  TRADE  OF  TO-MORROW 

It  is  prepared  to  co-operate  with  any  trade  associa- 
tion that  will  take  up  this  vital  question  of  scientific 
research.  Sir  WilHam  McCormick,  to  whom  the 
credit  for  this  new  departure  is  chiefly  due,  has  laid  it 
down  as  a  principle  that  the  State  will  work  in  this 
matter  in  conjunction  with  trade  associations. 
In  this  way  it  is  hoped  to  get  the  operations  of  the 
new  Department  upon  a  proper  scale,  in  keeping 
with  their  importance. 

Hitherto  the  State  has  been  wiUing  to  a  limited 
extent  to  assist  individual  researches,  but  at  last 
the  importance  of  the  subject  has  been  realised  in 
high  places.  The  near  future  should  see  the  estab- 
lishment of  numerous  Trade  Research  Associations 
working  in  conjunction  with  the  Government  for 
the  benefit  of  whole  industries  instead  of  individual 
firms.  The  relations  between  the  Government  and 
trade  under  the  present  scheme  of  the  Research 
Department  represent  the  nearest  approach  yet 
made  to  the  ideal. 

But  the  Department  is  perforce  doomed  to  work 
through  voluntary  associations  of  the  existing  type. 
Under  Sir  WiUiam  McCormick  it  has  advanced  from 
the  practice  of  dealing  with  private  firms  to  work- 
ing arrangements  with  groups  of  firms  in  Associa- 
tions. When  the  State  places  at  its  disposal  elected 
Trade  Councils  representing  whole  industries,  upon 
whose  attention  it  has  an  official  claim,  and 
whose  assistance  it  can  command,  then,  and  not 
till  then,  the  union  of  Science  and  Industry  will  be 
complete. 


CHAPTER  XVI. 

STATISTICS. 

Among  the  numerous  tasks  that  await  the  official 
Trade  Councils  of  the  future,  none  is  more  of  vital 
importance  than  the  preparation  of  adequate 
statistical  information. 

When  a  stockbroker  makes  a  price  and  completes 
a  bargain  he  has  to  go  to  the  board  and  "  mark 
it  up."  Every  detail  of  his  trade  is  thus  laid  open 
to  public  inspection.  All  his  experience,  all  his 
judgments,  are  thus  placed  freely  at  the  service  of 
the  whole  market.  In  return  for  the  information 
as  to  his  own  business,  which  the  stockbroker 
gives  to  every  one  of  his  competitors,  he  receives 
similar  information  from  everybody  else  in  the  same 
business.  The  same  sort  of  procedure  is  followed 
on  most  other  markets  and  exchanges.  The  result 
of  it  is  that  these  trades  are  both  standardised  and 
consolidated,  and,  while  they  have  to  stand  the 
full  force  of  legitimate  competition,  they  are  free 
from  the  risks  and  disadvantages  that  apply  to 
most  other  trades  which  are  carried  on  by  individuals 
in  the  dark. 

165 


i66        THE  TEADE  OF  TO-MORROW 

There  is,  it  seems  to  me,  scope  for  great  develop- 
ment in  trade  statistics,  if  the  principles  under- 
lying the  conduct  of  the  trade  of  the  stockbroker 
could  be  apphed  to  other  businesses.  Those  of 
us  who  are  closely  acquainted  with  the  habits  and 
methods  of  the  British  manufacturer  can  re- 
member a  time,  not  so  very  far  distant,  when 
auditors  and  accountants  were  considered  "  up-to- 
date  "  fads,  unworthy  of  the  attention  of  the  really 
serious  men  in  trade.  That  class  of  opinion  has 
now  disappeared,  and  it  is  extremely  rarely  that 
one  hears,  except  in  the  Bankruptcy  Court,  of  the 
absence  of  a  proper  system  of  accountancy  in 
connection  with  any  business. 

The  next  step  in  this  process  of  development 
will  be  the  recognition  of  the  need  for  a  sort  of 
auditor-general  for  every  trade.  The  advantages 
which  accrue  from  the  production  of  prompt  and 
accurate  figures  in  connection  with  individual 
businesses  are  now  universally  admitted.  But 
the  advantages  which  would  accrue  from  the 
collection  and  publication  of  general  figures  for 
any  one  trade  are  not  at  present  thoroughly  under- 
stood. 

The  average  British  manufacturer  is  working  in 
a  condition  of  hopeless  ignorance.  He  knows  all 
about  his  own  business,  but  so  far  as  the  general 
condition  of  the  trade  in  which  he  is  working  is 
concerned  he  knows  practically  nothing.  His  own 
expenses  are  carefully  analysed  under  proper 
headings,  such  as  materials,  labour,  rent,  insurance, 


STATISTICS 


167 


advertising,  travelling,  power,  depreciation,  and 
trade  expenses.  He  may  tell  you  that  materials 
cost  him  30  per  cent.,  wages  40  per  cent., 
advertising  5  per  cent.,  carriage  ij  per  cent., 
and  so  on.  He  knows  that  the  tendency  of  his 
own  business  is  for  materials  to  go  up,  and  that 
improvements  in  machinery  are  reducing  the  per- 
centage of  the  labour  cost.  But  he  has  no  idea 
as  to  the  relation  which  his  percentages  bear  to 
others  or  to  the  ideal. 

A  manufacturing  house  with  which  I  am  ac- 
quainted figures  that  a  special  class  of  operation 
costs  it  IS.  yd.  an  hour,  and  on  this  basis  makes 
its  estimates.  But  for  all  I  know,  the  proper  cost 
of  that  operation  may  be  is.  5^.  or  is.  9^.,  and  this 
particular  house  may  be  either  economical  or 
extravagant.  That  is  a  mystery  which,  under  the 
present  arrangements,  cannot  be  solved. 

If  ever  the  ideal  condition  is  reached  in  our 
trading  organisation,  every  British  industry  will 
have  a  representative  Trade  Council,  and  on  its 
staff  will  be  a  highly  paid  and  highly  quahfied 
statistical  officer,  whose  duty  it  will  be  to  keep  the 
trade  right  on  these  matters.  This  statistical 
officer  or  auditor-general  will  be  furnished  with 
powers  that  will  enable  him  to  collect  from  mem- 
bers of  the  association  all  the  information  that  he 
requires  for  the  general  good,  and  will  pubHsh 
week  by  week,  or  month  by  month,  the  result  of 
his  investigation  in  the  shape  of  tabulated  returns. 
When  this  is  done,  the  British  trader  will  discover 


i68         THE  TRADE  OF  TO-MORROW 

that  on  the  average,  in  his  line  of  business,  materials 
cost,  say,  35  per  cent.,  labour,  say,  42  per  cent., 
and  carriage,  say,  2  per  cent.  If  his  own  figures 
show  materials  40  per  cent.,  he  will  know  at  once 
that  he  is  5  per  cent,  higher  than  the  average  in 
this  respect,  and  that  as  the  average  is  the  product 
of  his  own  figures  and  others,  somebody  is  corres- 
pondingly below.  The  result  will  be  that  he  will 
mvestigate  his  methods  and  endeavour  to  discover 
where  the  fault  Hes.  And  the  end  of  any  such 
system  will  be  a  general  reduction  in  costs,  or,  to 
put  the  matter  in  another  way,  the  elimination  of 
an  appalhng  amount  of  waste  which  now  goes  on. 

All  this  information  would,  of  course,  be  collected 
by  the  statistical  officer,  under  proper  guarantees 
as  to  secrecy,  and  would  only  be  used  in  such  a 
way  as  not  to  damage  the  individual  giver  of  it. 
The  strongest  objections  to  any  such  system  would 
probably  come  from  t he  "  big  "  men,  who  are  generally 
conceited  enough  to  think  that  they  understand  all 
about  their  own  businesses.  But  the  most  super- 
ficial study  of  the  problem  will  show  that  unless 
the  big  man  represents  more  than  half  of  the  total 
industry,  he  will  receive  more  than  he  gives  in  the 
way  of  information. 

As  a  matter  of  fact,  there  is  nothing  original  or 
starthng  in  the  suggestion  that  trade  information 
should  be  collected  and  pubHshed  in  this  way.  The 
electric  light  industry,  tramway  companies,  gas 
corporations,  and  municipal  enterprises  are  doing 
every  week  exactly  what  I  suggest.    In  connection 


STATISTICS 


169 


with  electric  light,  the  most  elaborate  statistics 
are  prepared  week  by  week  and  published.  Thus 
every  engineer  in  charge  of  a  power  station  is  con- 
tinually engaged  in  endeavouring  to  improve  his 
figures,  and  show  better  results  than  his  rivals. 
The  same  process  is  at  work  in  less  obvious  ways 
in  every  up-to-date  trade,  particularly  in  motor, 
shipping,  and  rubber  companies.  In  these  industries 
it  is  extremely  common  for  one  man  to  be  a  director 
of  two  or  three  companies.  The  result  of  this 
arrangement  is  that  all  the  information  about 
which  we  are  now  talking  is  at  the  service  of  these 
companies. 

There  is  a  great  deal  more  in  this  subject  than 
appears  at  first  sight.  We  are  faced  with  the 
problem  of  increasing  British  trade.  It  is  admitted 
that  when  peace  comes  we  must  do  considerably 
more  business  than  ever  before.  This  is  the  only 
way  in  which  it  is  possible  to  meet  the  charges  that 
have  been  heaped  up  by  the  war.  Seeing  that 
prior  to  the  outbreak  of  hostiUties  we  were  just  as 
busy  as  we  could  be,  and  unemployment  was  at 
its  lowest  level,  it  is  obvious  that  we  can  only  in- 
crease our  output  by  a  wholesale  system  of  re- 
organisation, by  the  elimination  of  waste,  and  by 
the  study  of  economical  production. 

Now  these  things  can  only  be  done  on  the  basis 
of  figures.  We  must  alter  our  way  of  looking  at 
business.  We  must  give  up  thinking  of  individual 
concerns  and  study  trades  as  a  whole.  Only  in 
that  way  will  it  be  possible  to  bring  about  the 


170        THE  TRADE  OF  TO-MORROW 

increase  of  production  that  will  be  necessary  to  meet 
the  financial  needs  of  the  future.  There  is  for 
every  trade  an  ideal  costing  system,  and  it  should 
be  the  duty  of  the  statistical  officer  of  the  Trade 
Council  to  produce  that  system. 

Costing  systems,  which  have  acquired  considerable 
popularity  among  better-class  traders  in  the  last 
ten  years,  have  hitherto  been  regarded  as  a  means 
of  checking  competition   and    keeping  up  prices. 
They  are  generally  designed  to  educate  the  small 
man  as  to  the  real  costs  of  business,  and  thus  get 
him  out  of  the  habit  of  quoting  unremunerative 
prices.     The  costing  system  can  be  of  far  greater 
service  if  generally  adopted  by  whole  trades,  and, 
if  accompanied  by  the  publication  of  trade  statistics,' 
is  likely  to  have  the  effect  of  reducing  prices  and 
cheapening  production. 

Mr.  W.  Howard  HazeU,  in  an  article  on  Cost- 
finding  in  The  Times  Trade  Supplement  of  October, 
1916,  gives  some  valuable  information  as  to  the 
results  secured  from  the  introduction  of  a  proper 
system  of  costing  in  the  Master  Printers'  Associa-  ; 
tion.    Mr.  Hazell  fails  to  point  out  what  is  obvious 
to  any  careful  observer  of  printing  in  the  last  few 
years,  that   the  activities  of  the  Master  Printers' 
Association  in  this  and  other  ways  have  brought 
about  an  all-round  improvement  in  the  standard 
of  Enghsh  printing  work,  and  he  would  no  doubt 
admit    that    the    thorough    investigations    of    the 
Association  into  costs  have  had  a  very  great  deal 
to  do  with  this  improvement. 


STATISTICS 


171 


"  In  many  well-organised  industries  there  is 
an  efficient  system  adapted  to  the  particular  trade, 
which  is  recognised  as  essential  in  any  factory  where 
good  management  and  good  profits  are  desired.  On 
the  other  hand,  there  are  many  trades  which  are  not 
so  well  organised,  where  accurate  methods  for  cost- 
finding  have  not  been  studied,  and  where  the  quota- 
tions for  work  to  be  done,  or  charges  for  goods 
manufactured,  vary  considerably.  This  variation  is 
often  due  not  so  much  to  the  greater  efficiency  of 
one  factory  as  compared  with  another,  but  to  the 
difficulty  of  arriving  at  the  real  cost  of  production, 
when  the  question  is  comphcated  by  heavy  standing 
charges,  seasonal  trade,  and  work  produced  some- 
times by  hand  and  sometimes  by  machinery.  In 
trades  where  a  uniform  article  or  unit  is  produced, 
such  as  a  ton  of  coal,  a  tin  of  condensed  milk,  or 
the  haulage  of  a  ton-mile,  the  problem  is  much 
simpler  than  where  the  production  is  variable  in 
form,  value,  and  quantity. 

"  It  has  been  found  that  the  result  of  a  correct 
and  efficient  cost-finding  system  is  not  only  to  arrive 
at  all  the  costs  of  production,  but  to  preveni  waste 
and  delays  of  various  kinds,  to  check  errors  of 
management,  and  generally  to  increase  the 
efficiency  and  economy  of  the  works.  It  may  be 
said  that  any  accountant  could  instal  a  cost-finding 
system  in  a  factory,  but  modern  manufacturing  is 
so  complicated  that  each  industry  is  faced  by 
peculiar  difficulties,  and  though  the  broad  principles 
remain  the  same,  the  details  must  be  adjusted  to 


f 


172        THE  TRADE  OF  TO-MORROW 

the  circumstances  and  condition  of  each  trade. 
Herein  lies  the  advantage  of  the  subject  being 
dealt  with  by  well-recognised  leaders  in  the  industry, 
as  their  endorsement  of  any  methods  would  have 
far  more  weight  than  the  recommendations  of  an 
outsider,  who  might  be  thought  to  be  pushing  his 
ideas  for  his  own  pecuniary  benefit. 

"  The    war    has    shown     how    greatly    German 
trade  has  benefited    by  co-operation  amongst  the 
members   of  a   particular   industry;  and   the   old 
Ishmaelite  policy  of  every  man's  hand  against  every 
man  (which  was  too  prevalent  in  this  country)  is 
slowly  breaking  down.     There  is  much  yet  to  be 
done  in  organising  our  ways  and  standardising  our 
methods  to  meet  the  present  abnormal  conditions, 
and  the  more  difficult  and  competitive  times  that 
are  coming.  Probably  there  is  no  course  more  likely 
to  lead  to  success  and  to  bring  satisfactory  results 
m  the  immediate  future,  than  for  each  industry 
in  which  modern  cost-finding  methods  have  not 
been  adopted  and  standardised  to  investigate  the 
question,    prepare   a   suitable    system,    and    then 
carry  on  an  active  campaign  to  secure  its  general 
adoption." 

Anyone  who  has  worked  for  half  a  dozen  firms  in 
the  same  line  can  tell  amusing  stories  of  manu- 
facturers jealously  guarding  "  secret  processes  " 
"special  methods,"  which  are  really  grotesquely 
behind  the  general  level  of  practice  in  the  industry. 
It  has  been  known  for  a  manufacturer  to  be  at 
great  pains  to  keep  information  of  his  methods  from 


STATISTICS 


173 


a  rival  in  the  next  street— who  was,  in  fact,  work- 
ing on  a  vastly  better  system. 

We  have  so  far  considered  trade  statistics  in  their 
relation  to  costs,  but  there  is,  of  course,  the  other  side 
of  the  account  which  is  no  less  important.  There  is 
no  information  which  the  average  trader  regards 
as  more  confidential  than  that  which  concerns 
his  customers'  accounts,  and  the  amount  of  his  trade 
in  different  towns  or  different  markets. 

On  the  other  hand  it  can  be  argued  that  there  is 
no  more  stupid  form  of  secrecy.  If  it  were  possible 
to  lay  bare  the  secrets  of  twenty  makers  in  the  boot 
trade  it  would  probably  be  found  that  one  market  is 
permanently  overstocked  with  boots,  while  another 
is  badly  neglected.  It  might  similarly  be  discovered 
that  the  reason  for  the  low  price  of  a  particular  type 
of  article  is  that  far  too  much  of  it  is  manufactured. 

Statistics  and  Standardisation  run  together.  The 
diagram  on  p.  174  illustrates  vividly  the  advantage 
of  the  application  of  statistical  information  to 
processes  of  manufacture.  The  diagram  was  used 
by  Professor  ,  Ripper,  Vice-Chancellor  of  the 
University  of  Sheffield,  in  a  lecture  to  the  Royal 
Society  of  Arts  on  May  9th,  1917,  and  the  following 
explanation  extracted  from  the  lecture  makes  its 
meaning  clear: — 

"  The  diagram  supposes  a  piece  of  work  to  require 
four  operations  from  the  raw  material  to  the  com- 
pletion of  the  finished  product.  Two  pieces  of 
work,  'A'  and  '  B,'  were  started  at  the  same 
time,  but  by  different  methods.     In  each  of  the 


174        THE  TRADE  OF  TO-MORROW 

respective  stages,  the  irregular  A  line  indicates  the 
rate  at  which  the  work  is  done  upon  the  article  '  A, ' 
and  the  irregular  B  line  similarly  indicates  the  rate 
at  which  the  work  is  done  upon  the  article  '  B.' 
It  will  be  seen  that  during  the  first  operation  the  A 
process  is  quicker  than  the  B  process  ;  in  the  second 
operation  it  is  slower  ;  in  the  third  operation  the  A 

C  A^B*  -      D 


STATISTICS 


175 


process  is  again  the  faster,  and  in  the  fourth  opera- 
tion it  is  the  slower.  The  total  time  required  to 
complete  both  articles  *  A  '  and  '  B  '  is  shown  by 
the  diagram  to  be  the  same. 

*'  This  diagram  well  illustrates  the  conditions 
obtaining  in  all  forms  of  manufacture.  It  is  obvious 
by  studying  it  that  each  of  the  articles  could  easily 
have   been  completed  in   considerably   less   time. 


For  example,  in  the  first  operation  there  is  no  reason 
why  the  '  B  '  process   might    not,  in   the  future, 
be  similar  to  that  employed  in  '  A,'  and  if,  in  each 
operation  respectively,  the  best  methods  be  adopted, 
the  operation  will  be  completed  in  the  time  given  by 
the  line  OAC,  obtained  by  extending  the  line  OA 
parallel  to  that  of  the  best  process  in  each  case,  the 
whole  line  representing  the  sum  of  the  best  processes. 
This  line,  therefore,  represents  the  standard  method 
of  doing  the  piece  of  work  in  question  until  some  still 
better  method  is  discovered.     If  the  four  separate 
operations  had  not  been  analysed  it  would  never 
have  been  discovered  that  any  such  improvement 
could  have  been  made,  and  therefore,  if  no  atten- 
tion had  been  given  to  the  time  involved  in  the 
manufacture  of  the  article,  there  is  reason  to  fear 
that  the  quicker  process  in  each  case  might  easily 
have  degenerated  into  the  slower  methods  in  each 
case.     By  summing  up  all  the  slower  methods  we 
get  the  Hne  OBD  drawn  parallel  to  the  slower  pro- 
cesses, and  showing  that  the  total  time  taken  in 
this  case  is  several  times  as  great  as  is  required  by 
the  standard  method  line  OAC.     In  many  branches 
of  manufacture,  instead  of  there  being  only  four 
operations,  as  shown  on  the  diagram,  there  might 
easily  be  forty,  in  which  case  the  difference  between 
the  summation  of  the  forty  best  methods  and  the 
forty  slower  methods  might  make  a  very  consider- 
able difference  indeed  in  the  final  cost  of  the  product, 
resulting  in  the  one  case  in  a  handsome  profit  and 
in  the  other  case  in  a  serious  loss. 


176        THE  TRADE  OF  TO-MORROW 

The  principles  of  this  diagram  are  of  general 
application,  and  may  be  used  to  locate  sources  of 
loss  throughout  the  whole  process  from  the  raw 
material  upwards." 

An  important  field  for  the  activities  of  the  statis- 
tical officer  exists  in  connection  with  foreign  trade. 
There  is  an  immense  amount  of  work  to  be  done 
on  behalf  of  individual  industries  in  the  collection 
and  arrangement  of  the  statistics  of  other  countries. 
It  is  quite  remarkable  how  little  attention  is  paid 
to  these  matters  at  the  present  moment. 

A  good  deal  of  information  of  this  class  has  now 
to  be  obtained  from  the  Commercial  Intelligence 
Branch  of  the  Board  of  Trade,  but  the  number  of 
manufacturers  who  take  advantage  of  these  faciH- 
ties  is  extremely  limited.     The  reason  is  probably 
to  be  found  in  the  fact  that  a  Government  official 
is   seldom    the    proper    person    to   compile    trade 
statistics.     No  man  can  possibly  be  an  expert  in 
machinery,  boots,  jam,  eggs,  and  clothing.     These 
Government    Departments   endeavour   to   do   the 
impossible  when  they  produce  statistics  and  reports 
upon  different  branches  of  commerce.    The  only 
man  who  can  give  a  report  which  is  worth  having 
upon  the  export  of  boots  from  America  or  from  Ger- 
many is  a  man  who  knows  something  about  the  boot 
trade.     If  the  figures  are  to  be  useful  they  must  be 
analysed  and  subdivided  in  a  way  possible  only  to 
a  boot  man.      If   each   trade  were   to   employ  a 
statistical  officer  for  no  other  purpose  than  to  produce 
accurate  and  reliable  information  as  to  the  trade  of 


STATISTICS 


177 


competing  countries  In  neutral  markets,  the  expendi- 
ture and  the  trouble  would  be  amply  worth  while. 

But  I  have  not  by  any  means  exhausted  the  many 
sides  of  this  fascinating  subject  of  trade  statistics 
and  information.  We  have  heard  a  good  deal  lately 
about  "key"  industries,  and  the  Government, 
which  has  to  shoulder  the  blame  for  anything  that 
goes  wrong,  is  blamed  for  allowing  certain  industries 
to  drift  into  the  hands  of  the  Germans.  I  cannot 
see  what  the  Government  has  to  do  with  it,  or  how 
this  catastrophe  could  be  avoided  in  the  absence  of 
statistics  and  information. 

The  war  has  shown  us  that  we  have  been  relying 
too  much  upon  Germany  for  certain  articles  upon 
which  our  business  depends,  but  if  the  war  had  not 
intervened  we  should  still  be  in  ignorance  of  these 
matters.  The  fact  is  that  individual  manufacturers 
have  been  carrying  on  their  business  in  their  own 
way,  as  of  course  they  were  perfectly  entitled  to  do, 
and  that  they  have  all  discovered  that  certain  articles 
could  be  bought  advantageously  in  Germany.  They 
had  all  hoped  that  their  competitors  were  ignorant 
of  this  advantage,  and  Germany  has  been  allowed 
to  secure  the  business  because  different  British 
manufacturers  were  not  on  speaking  terms  with 
one  another. 

We  have  now  discovered  these  key  industries, 
which  are  in  the  hands  of  the  Germans,  but  there 
are  many  more  which  are  controlled  by  other 
countries,  notably  America,  and  unless  some  system 
is  available   whereby  our  traders   will   pool   this 

M 


-f 


178        THE  TRADE  OF  TO-MORROW 

information  and  allow  it  to  be  circulated  for  the 
common  good,  no  power  on  earth  can  stop  a 
recurrence  of  the  danger, 

I  have  no  desire  to  enter  into  the  tariff  controversy, 
or  to  express  any  views  on  the  merits  of  free  trade 
or  protection,  but  it  is  worth  while  pointing  out  in 
this  connection  that  tariffs  and  statistics  must  go 
hand  in  hand.  It  is  surely  quite  reasonable  to  ask 
that,  in  considering  the  question  of  a  tariff,  the 
Government  shall  require  that  the  industry  shall 
show  the  necessity  for  some  form  of  protection. 

It  may  well  be  that  the  German  or  the  American 
is  capturing  the  trade  by  reason  of  superior  organi- 
sation, more  highly  developed  co-operation  between 
makers,  improved  methods  of  manufacture,  lower 
costs,  and  the  elimination  of  wasteful  and  extrava- 
gant competition.  It  would  be  unreasonable  for 
the  home  trade  to  ask  for  protection  in  order  that 
it  may  bolster  up  its  own  antiquated  methods  and 
thus  deprive  the  public  of  the  advantages  of  the 
more  scientific  procedure  of  the  foreigner.  If,  on 
the  other  hand,  the  British  industry  could  show 
through  its  statistical  officer  that  its  methods  were 
right  and  its  systems  good,  and  it  was  still  unable 
to  meet  foreign  competition,  then  it  seems  to  me 
that  the  case  for  a  tariff  would  be  unanswerable. 

To  sum  up  the  whole  matter,  my  plea  is  for  the 
appointment  by  each  Trade  Council  of  a  quahfied 
accountant,  auditor,  or  statistician,  to  bring  to  the 
industry,  as  a  whole,  the  benefits  which  arise  from 
proper  accountancy  and  recording  methods  in 
individual  businesses. 


CHAPTER  XVII. 

FISCAL    REFORM. 

Fiscal  reform  is  no  part  of  my  subject,  and  I  should 
not  refer  to  it  but  for  the  fact  that  any  discussion  on 
trading  matters  which  ignored  this  question  would 
be  regarded  by  some  people  as  entirely  beside  the 
point.  In  my  judgment,  tariff  reform  has  been 
allowed  to  occupy  far  too  much  of  the  stage. 
This  is  very  largely  due  to  the  activities  of  Chambers 
of  Commerce,  and  other  institutions  which,  by 
reason  of  the  fact  that  they  attempt  to  cover  every 
trade,  are  unable  to  deal  with  the  practical  problems 
of  any.  These  bodies  are  driven  into  politics,  and 
they  take  up  tariff  reform  because  the  idea  of  a 
tariff  has  a  way  of  appealing  to  the  manufacturing 
classes  from  whom  most  of  their  subscriptions  are 
derived. 

I  agree  with  that  part  of  the  tariff  programme 
which  calls  attention  to  the  weakness  of  the  British 
industrial  position.  It  is  no  answer  to  this  argu- 
ment to  point  out,  as  most  free  traders  do,  that  we 
are  still  at  the  top  of  the  scale  of  export  business,  and 
that  America  and  Germany  remain  in  second  and 
third  positions.     It  is  perfectly  true  that  we  are 

179 


i8o        THE  TRADE  OF  TO-MORROW 


doing  a  wonderful  export  business.  The  per  capita 
trade  of  the  three  great  industrial  nations — Great 
Britain,  Germany  and  America — in  191 1,  was  in  the 
proportions  of  six,  three,  and  two.  But  the  wise 
business  man  is  not  the  one  who  counts  up  the  gains 
of  years  ago  and  takes  satisfaction  from  them  :  it 
is  he  who  looks  to  the  future.  If  America,  Germany, 
Japan,  or  any  other  country,  is  allowed  to  develop 
better  trading  methods,  better  systems  of  produc- 
tion, than  we  have  here,  then  whatever  may  be  the 
supremacy  at  the  moment,  the  time  is  coming  when 
we  are  going  to  drop  behind. 

I  part  company  with  the  tariff  party  when  they 
claim  that  these  tendencies  are  the  result  of  a  tariff 
only,  or  that  they  can  be  checked  by  a  tariff  only. 
The,  nation  that  will  win  the  industrial  race  is  not 
the  nation  with  the  most  scientific  tariff,  but  the 
nation  with  the  best  all-roimd  organisation. 

The  question  of  a  tariff  has  been  hopelessly  com- 
pHcated  by  poHtical  party  considerations.  Peers 
and  poHticians  have  thrown  themselves  into  the 
debate,  and  Tariff  versus  Free  Trade  has  been  ele- 
vated to  a  position  altogether  too  important,  and 
held  up  as  a  matter  of  poHtical  principle.  But  in 
reality  the  advisability  or  otherwise  of  a  tariff  has 
surely  nothing  to  do  with  principle  :  it  is  a  matter 
of  detail  and  of  expediency.  A  tariff  may  be  neces- 
sary to  one  trade  and  fatal  to  another.  It  may  be 
good  at  one  time  and  bad  at  another.  It  may,  as 
we  have  lately  discovered,  be  necessary  for  reasons 
which  are  reallv  military  and  not  economic  at  all. 


FISCAL  REFORM 


181 


'*  There  is  no  need  to  stir  the  embers  of  ancient 
controversies  under  their  whitening  ashes.  Accord- 
ing to  the  circumstances  of  the  individual  case  we 
can  be  Free  Traders,  Protectionists,  Socialists,  at 
the  same  time  in  different  parts  of  the  Empire."  » 

The  question  of  a  tariff,  however,  is  extremely 
useful  to  my  argument.  If  this  country  does  decide 
that  it  will  experiment  with  protection  (a  decision 
that  I  personally  hope  will  never  be  taken),  we  shall 
arrive  at  the  point  when  it  will  be  necessary  to  settle 
how  much  per  cent,  to  put  upon,  say,  boots.  As  we 
are  at  present  constituted,  that  problem  will  have 
to  be  settled  by  Imperial  Parliament  elected  upon  a 
basis  which  has  nothing  to  do  with  boots,  or  worse 
still,  by  some  Committee  composed  of  Members  of 
Parliament  and  their  cousins,  with  probably  a  noble 
peer  thrown  in  because  he  happens  to  be  the  Chair- 
man of  a  Boot  Company. 

The  poor  boot  trade  will  not  be  consulted  in  the 
matter  at  all.  It  is 'true  that  the  Boot  Section  of 
the  Chamber  of  Commerce  will  pass  some  resolution, 
but  the  Chamber  of  Commerce  is  composed  of 
avowed  tariff  reformers,  and  the  Boot  Section  can- 
not pretend  to  represent  the  industry  from  which  it 
takes  its  name.  Surely  if  we  require  to  know  what 
would  be  good  or  bad  for  the  boot  industry  in  the 
matter  of  a  tariff,  it  is  an  essential  preliminary  to 
put  that  industry  into  a  position  where  it  can  express 
an  opinion  on  the  matter.     That  can  only  be  done 

^  vSir  Joseph  Compton-Rickett  in  the  Contemporary  Review^  May, 
1916. 


,i«f^ 


182        THE  TRADE  OF  TO-MORROW 

by  the  establishment  of  some  representative  organi- 
sation on  the  hnes  of  that  for  which  I  am  pleading 

There  is  another  point  I  should  like  to  make  while 
on  this  question  of  tariff.     The  most  ardent  tariff 
reformer  will  admit  that  tariffs  should  be  used  as  a 
means  of  defence  against  the  industrial  rival   and 
not  as  a  means  of  bolstering  up  inadequate  methods 
or  lack  of  enterprise  and  ability  on  our  part.     If  the 
population  here  is  enjoying  the  advantage  of  better 
boots  by  reason  of  an  American  invasion,  boots 
which  are  at  the  same  time  cheaper  and  more  durable 
than  those  made  at  home,  then  it  would  be  an 
iniquity  to  use  a  tariff  for  the  purpose  of  robbing  the 
population  of  that  advantage  in  order  to  help  an 
industry  which  was  obviously  out  of  date. 

If  the  boot  trade  wants  a  tariff  it  ought  first  to  be 
made  to  show  that  it  is  properly  organised,  that  it 
IS  run  upon  scientific  lines,  that  there  is  no  waste, 
that  Its  arrangements  for  output  are  of  the  most 
modern  description,  that  it  has  made  every  possible 
use  of  the  services  of  science  in  developing  its 
industry.  If,  having  done  all  this,  it  is  still  unable 
to  meet  foreign  competition,  owing  to  the  presence 
of,  say.  sweated  labour  abroad  or  some  local  advan- 
tage which  cannot  be  secured  at  home,  then  the 
argument  for  a  tariff  would  be  an  extremely  strong 
one.  ^  ^ 

Thanks  to  the  war,  we  have  several  very  useful 
examples  of  protection  in  practice  to  guide  us  in  the 
consideration  of  this  subject.  We  have  not  it  is 
true,  adopted  the  full  Protectionist  programme  but 


FISCAL  REFORM 


183 


by  means  of  prohibition,  limitation  of  imports, 
export  bounties  and  actual  tariffs,  we  have  accumu- 
lated a  number  of  very  convenient  illustrations  of 
the  working  of  the  principles  of  protection.  A  study 
of  any  of  these  Orders,  of  the  muddle  and  confusion 
which  have  followed  from  them,  the  hardships  and 
injustice  which  they  have  inflicted  in  different  ways, 
is  quite  sufficient  to  justify  the  present  suggestion 
that  no  tariff  can  ever  be  satisfactorily  settled  in  a 
Central  Government  Office.  A  tariff  is  essentially  a 
matter  of  business,  and  to  attempt  to  touch  it  with- 
out consulting  those  who  have  experience  of  the 
industry  affected  is  obviously  a  clumsy  and  im- 
possible procedure. 

The  Government  decided,  in  the  name  of  the  war, 
to  set  up  a  system  of  export  bounty  on  palm  kernels. 
It  is  not  intended  here  to  discuss  the  case  for  or 
agia.inst  this  action,  but  it  should  be  noted  that  this 
decision  was  taken  and  put  into  effect :  and  then, 
and  not  before,  ParUament  was  consulted  on  the 
matter.  The  Times  report  of  the  debate  in  the 
Commons  on  August  4th  shows  the  resentment  of 
the  House  of  Commons  at  this  method  of  issuing 
Orders  and  discussing  them  afterwards.  But  the 
position  of  the  trader  under  a  system  of  protection 
designed  and  elaborated  in  a  Government  Depart- 
ment would  be  far  worse  than  that  of  the  House  of 
Commons  in  the  matter  of  the  palm  kernel  regula- 
tions. 

A  very  useful  example  of  the  absolute  need  for 
expert  advice  in  this  matter  of  tariffs  is  furnished 


i84        THE  TRADE  OF  TO-MORROW 

by  the  experience  of  the  duty  on  pianos  and  parts. 
The  Government  put  heavy  duties  on  foreign  pianos 
in  order  to  stop  their  importation,  and  at  the  same 
time  to  encourage  British  piano  makers  to  make 
every  effort  to  export  home-made  pianos,  and  thus 
m  both  ways  they  hoped  to  help  the  difficult  problem 
of  exchange.     If,  however,  they  had  had  the  advice 
of  an  official   Piano   Makers'  Trade  Council  they 
would  undoubtedly  have  found  some  way  of  achiev- 
ing this  result  with  far  less  trouble  than  was  actually 
involved.    The  duty  on  pianos  and  parts  carried 
with  it  of  course  a  drawback  system  in  the  event 
of  any  of  these  goods  being  exported.     In  view  of  the 
impossibiUty    of    manufacturers    getting   domestic 
suppHes  of  certain  parts,  a  very  great  impetus  was 
given  to  the  importation  of  a  number  of  essential 
parts,  all  makers  of  fittings,  frames,  and  so  on,  being 
engaged  on  munition  work. 

The  difficulties  in  the  matter  became  apparent 
when  pianos  began  to  be  exported  containing  any 
parts  which  had  paid  the  new  duty  on  importation. 
The  work  of  identifying  the  parts  on  which  duty  had 
been  paid  proved  too  much  for  the  Inspectors  of 
Customs.  It  was  found  that  in  a  consignment  of 
half  a  dozen  pianos  about  six  hours  were  occupied 
in  displaying  the  identification  marks  on  the  various 
parts  and  packing  the  crate  ready  for  the  inspector's 
seal.  One  of  two  things,  therefore,  happened : 
either  the  Government  lost  in  inspectors'  time  far 
more  than  they  got  out  of  the  duty  on  the  imported 
parts,  or  in  cases  where  the  inspection  was  made  on 


FISCAL  REFORM 


185 


the  manufacturer's  premises  the  manufacturer  was 
put  to  greater  expense  by  claiming  rebate  than 
the  amount  which  he  received  in  respect  of  that 
claim. 

"  Consequently,"  says  The  Times  Trade  Supple- 
ment of  April,  1916,  "  an  endeavour  was  made  to 
simplify  matters.  Trade  estimates  were  taken, 
showing  the  total  value  of  the  piano  output  and  the 
proportion  exported.  The  amount  paid  in  duty  on 
imported  parts  was  known  to  the  Customs,  and  it 
was  a  simple  matter  to  value  the  average  amount 
due  for  rebate  on  the  value  of  pianos  exported.  It 
is  understood  that  the  Customs  authorities  were 
ready  to  adopt  such  a  system,  but  at  once  obstacles 
were  created,  as  one  might  expect  would  be  the  case. 

"  The  first  difficulty  was  set  up  by  the  Custom 
House  itself,  where  the  authorities  pointed  out  that, 
much  as  they  would  like  to  adopt  the  scheme,  it 
was  contrary  to  the  law  under  which  they  were 
working,  the  Finance  Act  of  1915,  and  in  order  to 
enable  them  to  adopt  such  a  scheme  it  would  be 
necessary  for  the  Act  to  be  amended.  There  seemed 
to  be  such  a  clear  case  that  the  President  of  the 
Piano  Manufacturers'  Association  petitioned  the 
Chancellor  of  the  Exchequer  to  receive  a  deputation 
to  place  before  him  the  views  of  the  trade  in  regard 
to  drawback.  Mr.  McKenna  declined  to  see  the 
deputation,  and  there  the  matter  rests  so  far  as  the 
Custom  House  is  concerned." 

American  manufacturers  have  discovered  to  their 
cost  some  of  the  disadvantages  of  tariffs  made  in 


'1 


if. 


i86        THE  TRADE  OF  TO-MORROW 

high  places.  In  some  cases  the  American  tariff 
raises  the  costs  of  manufacture  so  high  that  not  only 
does  It  prevent  the  American  manufacturer  from 
competmg  in  the  foreign  market,  but  it  allows  foreign 
competitors  to  get  in  and  undersell  in  the  home 
market  notwithstanding  the  existence  of  a  tariff 
1  his  rather  complicated  point  is  set  out  very  clearly 
in  the  Iron  Age  of  New  York,  which  comes  to  the 
conclusion  that  dumping  may  be  in  some  circum- 
stances entirely  normal  and  continuous,  and  that 
tariffs  cannot  stop  it. 

But  the  greatest  trouble  with  tariffs  is  what  is 
known  in  the  States  as  "  graft."    The  most  power- 
ful  argument  against  a  tariff  is  that  it  must  tend  to 
Wer  the  standard  of  Parliament.     Even  if  the 
Bntish  legislator  should  be  proof  against  direct  graft 
there  will  still  be  a  tendency  for  particular  trade 
interests  to  send  men  to  Parliament  for  the  purpose  of 
promoting  these  interests.     Whether  under  a  system 
of  tanff  we  should  escape  the  Parliamentary  scandals 
which    are    associated  with  every  other    tariffed 
country  in  the  world  remains  to  be  seen,  but  on  the 
introduction  of  a  Tariff  Bill  every  Member  of  Parlia- 
ment is  bound  to  be  subjected  to  the  most  persistent 
troublesome,  and   tempting   lobbying.     Now   if   a 
system  of  trade  government  were  established  if  we 
were  to  decentralise  all  these  trade  matters,  take 
them  out  of  the  province  of  Parliament  altogether 
and  set  up  Trade  Councils  in  every  trade  to  which 
these  matters  could  be  referred,  this  grave  danger 
of  graft  would  disappear.     It  would  be  impossible 


FISCAL  REFORM 


187 


to  bribe  a  Trade  Council  to  alter  its  views  with  regard 
to  some  matter  that  vitally  affected  its  trade. 

It  may  be  thought,  indeed  it  has  been  suggested, 
that  a  Trade  Council  would  at  once  demand  protec- 
tion for  its  trade.  This  is  not  necessarily  true.  The 
Trade  Committee  of  the  Chamber  of  Commerce 
demands  a  tariff,  but  that  Committee  is  not  represen- 
tative. The  persons  upon  it  go  there  chiefly  because 
they  favour  a  tariff  policy  and  look  to  the  Chamber 
of  Commerce  to  help  them  to  promote  it.  If  instead 
of  a  Committee  of  the  Chamber  of  Commerce,  there 
were  a  representative  Trade  Council  elected  by  the 
votes  of  every  member  of  the  trade,  it  is  extremely 
doubtful  whether  that  elected  Council  would  accept 
the  views  so  freely  expressed  by  these  self-appointed 
Committees,  which  are  at  present  the  only  spokes- 
men for  the  industry. 

The  point  is,  however,  not  worth  labouring.  It  is 
too  obvious  that  no  tariff  should  be  contemplated, 
until  the  true  opinion  of  the  trade  concerned  had 
been  ascertained.  There  is  no  greater  scandal  in 
politics  than  the  way  in  which  tariff  agitators  have 
produced  trading  examples  without  any  authority 
to  speak  for  the  interested  parties. 

From  the  Empire  point  of  view  nothing  could  be 
more  dangerous  than  a  revival  of  our  old  political 
Free  Trade  and  Protection  controversies.  To  have 
the  varying  interests  of  different  parts  of  the  Empire 
made  the  subject  of  party  welfare  in  the  mother 
country  is  a  procedure  fraught  with  extreme  danger 
to  the  future  of  the  State.     Imperial  Parliament 


.  F' 


i88        THE  TRADE  OF  TO-MORROW 

must,  of  course,  have  the  last  word  on  the  question 
of  a  tariff,  but  it  is  obvious  that  each  industry  must 
have  a  chance  to  state  its  case  officially  and  repre- 
sentatively, and  this  can  only  be  done  through  Trade 
Councils  which  can  speak  in  the  name  of  the  whole 
industry. 


CHAPTER  XVni. 


EXPORT. 


It  is  useless  to  increase  output  unless  provision  is 
made  for  its  disposal.  There  is  no  more  advan- 
tageous method  of  disposal  than  exportation.  In 
fact,  exportation  on  an  unprecedented  scale  is 
essential  to  us  for  many  pressing  reasons. 

Ever  since  the  outbreak  of  war  we  have  been 
exporting  credit,  and  steps  must  be  taken  to  recover 
that  commodity.  During  the  centuries  we  have 
gradually  risen  to  the  proud  position  of  the  greatest 
creditor  nation.  That  position  has  now  been  very 
seriously  weakened  and  must  be  recovered.  In 
order  to  finance  the  war  we  have  been  obliged  to 
call  in  loans  abroad  and  to  reverse  the  old  position 
by  raising  external  loans.  It  is  quite  essential  to 
us  to  get  back  to  our  old  status  in  this  matter,  and 
those  foreign  loans  must  be  replaced.  Hence  the 
need  for  exports. 

But  the  duty  to  export  can  be  stated  in  another 
way.  We  lead  mankind  because  we  have  the  repu- 
tation for  being  the  greatest  civihsing  force  in  the 
world.  We  stand  in  the  eyes  of  the  nations  for 
progress,   but   progress  reduced  to   practical  and 

189 


''J 


190        THE  TRADE  OF  TO-MORROW 

material  terms  means  boots  and  shoes,  railways 
sanitary  appliances,  knives  and  forks,  soap,  and 
watches,  and  on  the  extent  to  which  we  supply  these 
tmngs  rests,  m  some  degree  at  least,  our  position 
in  the  van  of  civihsation. 

Although  we  have  per  head  (I  am  speaking  now  of 
pre-war  times)  the  largest  export  business  in  the 
world,  the  full  possibilities  of  exportation  have 
never  been  reaHsed  in  this  country.  It  is  the 
greatest  folly  to  rest  content  with  the  fact  that  we 
happen  to  be  doing  more  business  in  this  way  than 
others.  We  have  been  at  it  for  centuries  ;  others 
have  only  just  begun  :  and  it  would  indeed  be  a 
marvel  if,  after  a  mere  thirty  or  forty  years,  either 
Germany  or  America  were  able  to  show  an  export 
position  which  would  compare  with  ours. 

I  cannot  too  much  insist  that  it  is  necessary  to 
reahse  that  we  are  in  danger  of  losing  not  only 
our  lead  in  export  matters,  but  our  export  trade 
Itself,  unless  we  improve  our  methods.    The  posi- 
tion m  regard  to  any  particular  industry  in  a  par- 
icular  foreign  market  is  roughly  this.    The  German 
trade,  through  its  cartel,  has  a  perfect  system  of 
representation  in  that  market.    There  is  no  competi- 
tion as  between  Germans.     America  is  in  almost  the 
same  position,  where,  through  one  of  their  export 
associations  or  through  one  of  their  huge  trusts 
they  have  that  market  properly  organised  and  its 
requirements  looked  after  by  an  expert  staff     But 
Great  Britain,  which  for  centuries  has  been  in  the 
habit  of  supplying  this  market,  has  nothing  but  a 


EXPORT 


191 


personal  connection  between  a  number  of  individual 
British  manufacturers  and  a  number  of  individual 
foreign  buyers.  Those  individual  manufacturers 
are  in  many  cases  in  direct  competition  with  each 
other,  and  each  of  them  has  to  meet  not  only  the 
competition  of  the  German  and  of  the  American, 
but  the  still  more  dangerous  competition  of  his 
fellow-countrymen . 

There  is  no  attempt  on  the  part  of  that  British 
trade  as  a  whole  to  study  or  to  capture  that  market. 
So  long  as  it  suits  individual  manufacturers  for 
their  own  individual  ends  to  carry  on  business  the 
nation  is  content  to  allow  them  to  do  so.  But,  ' 
except  for  a  Consular  Service  the  inadequacy  of 
which  I  will,  for  the  moment,  take  for  granted,  there 
is  no  attempt  on  the  part  of  the  British  nation  to 
safeguard  its  interests  in  foreign  markets.  We  are 
committed  to  the  poHcy  oi.laissez  jaire.  The  Board 
of  Trade  will  issue  all  sorts  of  regulations  and  appoint 
all  sorts  of  inspectors,  all  of  them,  however  necessary 
they  may  be,  of  a  nature  to  hamper  industry,  but 
no  Government  Department  will  concern  itself 
with  the  work  of  developing  foreign  markets  on 
behalf  of  British  trades. 

There  can  no  longer  be  any  doubt  that  every  trade 
must  present  a  united  front  to  foreign  competition. 
The  struggle  of  the  future  in  the  foreign  market  will 
be  between  German  goods,  American  goods,  Japanese 
goods,  and  British  goods,  and  that  competition  will 
be  sufficiently  severe  without  further  competition 
between  individual  British  manufacturers.     In  fact. 


i% 


192        THE  TRADE  OF  TO-MORROW 

if  the  present  system  remains  unaltered,  the  British 
manufacturer  does  not  stand  a  chance  against  the 
foreigner. 

We  hear  a  great  deal  about  the  German  com- 
mercial traveller,  and  there  is  no  doubt  that  the 
Germans  have  developed  a  system  of  personal 
representation  in  foreign  markets  which  is  by  far 
the  best  of  its  kind.  Our  own  colonies  are  overrun 
with  German  representatives  to  such  an  extent  that 
I  was  told  by  a  hardware  dealer  in  Winnipeg,  that 
his  records  showed  nine  visits  from  German  repre- 
sentatives to  every  one  from  English  travellers. 

Travelling  abroad  is  an  expensive  luxury.  To 
maintain  an  adequate  staff  of  foreign  travellers  is 
beyond  the  means  of  most  Enghsh  manufacturers. 
In  order  to  arrive  at  only  the  pre-war  state  of  per- 
fection of  the  German  in  this  respect,  manufacturers 
must  combine. 

There  are  those  who  argue  that  this  can  only  be 
done  by  means  of  wholesale  combinations  and 
amalgamations,  the  buying  up  and  uniting  of  busi- 
nesses, and  the  creation  in  this  country  of  the  five 
million  instead  of  the  £100,000  standard  as  the 
commercial  unit.  I  submit  that  the  same  results 
may  be  possible  by  a  system  of  co-operation  through 
recognised  Trade  Councils  such  as  I  have  outlined. 

Another  weak  spot  in  English  arrangements  for 
foreign  representation  is  that  the  men  who  travel  for 
us  are  not  always  experts  in  the  goods  which  they 
have  to  sell.  In  the  absence  of  co-operation  between 
manufacturers  of  a  kind,  it  is  extremely  common 


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193 


for  half  a  dozen  houses  in  quite  different  trades  to 
combine  together  to  pay  the  expenses  of  a  repre- 
sentative to  some  market  abroad.  The  result  is 
that  a  representative  is  chosen  by  reason  of  his 
knowledge  of  the  locality  to  which  he  is  assigned, 
his  knowledge  of  the  language,  and  his  general 
commercial  ability.  He  cannot  be  an  expert  in  the 
half  a  dozen  trades  which  he  is  called  upon  to  repre- 
sent. He  can  do  little  more  than  show  the  printed 
catalogue  and  use  such  personal  influence  as  he 
possesses  to  secure  a  share  of  the  orders  that  are 
going.  If  instead  of  different  trades  clubbing 
together  to  meet  the  expenses  of  a  foreign  represen- 
tative, the  custom  were  for  men  in  the  same  trade 
to  join  hands,  it  would  be  possible  to  send  to  each 
market  an  expert  in  each  industry. 

We  are  constantly  told  of  the  abiUty  of  the  Ger- 
man to  adapt  himself  to  the  requirements  of  a 
particular  market.  Our  Consuls  have  written  reams 
to  show  how  German  goods  are  so  made  as  to  meet 
the  peculiarities  of  the  buyer.  The  reason  for  this 
is,  in  my  judgment,  the  fact  that  the  intermediary 
between  the  German  and  the  buyer  is,  as  a  rule,  a 
technical  expert  in  the  goods  which  he  is  called  upon 
to  sell.  These  trifling  alterations,  which,  however, 
make  for  success  or  failure,  are  matters  which 
demand  the  attention  of  the  expert. 

But  apart  from  these  details  it  is  obvious  that 
the  best  salesman  is  the  man  who  is  thoroughly 
acquainted  with  the  goods  which  he  has  to  sell. 
The  old  system  under  which  we  export  our  products 

N 


194        THE  TRADE  OF  TO-MORRO^y 

through  some  merchant  house  which  knows  all 
about  bills  of  lading  and  customs'  peculiarities  and 
ships  everything  from  boot-blacking  to  pianos,  is 
doomed  in  face  of  the  method  which  the  Germans  have 
developed,  through  their  cartels  and  selling  organi- 
sations, of  placing  the  whole  resources  of  Germany 
m  any  particular  industry  in  the  hands  of  an  expert 
staff  in  each  market. 

While  on  the  subject  of  export  it  may  be  interest- 
ing to  notice  what  is  happening  at  the  moment  on 
the  other  side  of  the  Atlantic.  The  European  War 
has  given  to  American  exporters  great  opportunities 
for  expansion,  and,  as  British  manufacturers  know 
to  their  cost,  full  advantage  has  been  taken  of  those 
opportunities,  i 

The  Chief  of  the  Bureau  of  Foreign  and  Domestic 
Commerce  at  Washington,  Dr.  Edward  Ewing  Pratt, 
in  a  Report  to  the  International  Trade  Conference 
held  at  New  York,  in  December,  1915,  says  :— 

"  The  growth  of  our  export  trade  in  certain  parts 
of  the  world  is  worth  a  httle  very  serious  con- 
sideration. If  we  compare  our  foreign  trade  in 
1913  with  our  trade  in  1915,  we  find  some  very 
mteresting  results.  Supposing  we  compare  the  four 
months— June,  July,  August,  September,  1913,  with 
the  same  four  months  in  1915  :  we  find  that  during 
that  period  our  trade  with  Canada  has  decreased 
about  9  per  cent.  ;  our  trade  with  Central  America 

'Since  these  lines  were  written  America  has  joined  the  Allies   but 
It  does  not  follow  that  American  manufacturers  will,  on  that  account 
lose  all  the  advantages  which  the  war  has  brought  to  them 


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195 


has  remained  practically  stationary  ;  our  trade  with 
South  Africa  has  increased  12  per  cent.  ;  our  trade 
with  South  America  has  increased  22  per  cent.  ;  our 
trade  with  Asia  has  increased  51  per  cent.  ;  and, 
perhaps  most  remarkable  of  all,  our  trade  with 
AustraUa  has  increased  77  per  cent.  These  facts 
demonstrate  beyond  question  that  our  trade  with 
countries  unaffected  directly  by  the  war  has  in- 
creased temporarily. 

"  The  next  important  question  for  consideration 
is  whether  or  not  we  shall  be  able  to  hold  this  trade. 
Some  people  are  of  the  opinion  that  following  the 
war  the  European  countries  will  flood,  not  only  our 
own  market,  but  the  other  markets  of  the  world, 
with  cheaply-made,  low-priced  manufactured 
articles.  The  predominance  of  opinion,  however, 
seems  to  be,  and  I  must  confess  that  the  facts  and 
logic  of  the  situation  seem  to  urge  this  view,  that 
the  costs  of  production  and  consequently  prices 
will  be  much  enhanced  in  European  coimtries  and 
that,  in  spite  of  the  best  organised  and  the  most 
vigorous  efforts  on  the  part  of  our  European  com- 
petitors, they  will  not  be  able  to  compete  in  our 
own  markets  and  in  other  markets  of  the  world  on 
as  favourable  terms  as  they  have  been  able  to 
compete  heretofore.  I  believe,  and  I  find  that 
most  of  those  who  are  professionally  engaged  in 
foreign  trade  hold  a  similar  opinion,  that  we  shall 
be  able  to  retain  the  major  part  of  the  markets 
which  we  gain  during  the  present  disturbed 
world  conditions." 


196        THE  TRADE  OF  TO-MORROW 


Newspaper  writers  are  very  fond  of  telling  us 
what  glorious  opportunities  await  the  British 
manufacturer  in  Russia.  But  they  fail  to  point 
out  what  is  happening  to-day  between  America 
and  Russia,  and  the  struggle  that  is  in  front  of  us 
when  peace  comes  to  catch  up  the  start  which 
America  will  have  had.  Dr.  Pratt,  in  the  same 
Report,  says  : — 

"  There  is  one  market  especially  which  is  worth 
the  most  serious  attention  on  the  part  of  every 
manufacturer  and  exporter.     I  refer  to  Russia.     The 
imports  into   Russia   during  the  last   few  years, 
averaged    about     $500,000,000 ;  roughly    one-half 
of  these  imports  have  come  from  Germany.     Not 
all  of  those  products  have  been  of  German  origin, 
for  the  Germans  have,  in  many  cases,  acted  as  the 
middleman  for  the  Russian  trade.     Here  is  a  great 
trade  open  at  least  on  fair  and  equal  basis  to  the 
American  manufacturer  and  exporter.     We  must 
not  forget  that  Russia  is  a  country  of  great  natural 
resources,  a  country  which  is  in  large  part  unde- 
veloped.    Her    railroads,    her    ports,    her    public 
utiUties  are  still  in  large  part  to  be  built.     Her 
mines  and  natural  resources  are  in  large  part  still 
to  be  developed.     And  let  me  point  out  that  Russia 
during  the  next  fifty  years  will  go  through  a  period 
of  development  very  much  like  that  through  which 
the  United  States  has  been  going  in  the  last  fifty 
years.     Our  manufacturers  and  exporters  are  par- 
ticularly well  qualified  to  meet  the  urgent  demands 
of  the  Russian  market." 


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197 


The  American  Government  understands  the  needs 
of  expert  foreign  representation  much  better  than 
does  our  own  Board  of  Trade,  as  is  shown  by  the 
announcement  that  the  Bureau  of  Foreign  and 
Domestic  Commerce  of  the  United  States  has 
appointed  a  special  agent  to  investigate  the  field 
for  railway  equipment  and  supplies  in  the  far 
East,  Australia,  and  South  Africa.  The  British 
Government  would  in  like  case  have  sent  a  Trade 
Commissioner  to  one  of  these  places,  with  general 
instructions  to  report  on  trade  conditions,  but  no 
case  is  on  record,  so  far  as  I  am  aware,  of  the  Govern- 
ment ever  having  appointed  a  special  agent  for 
the  purposes  of  a  special  industry  to  investigate 
a  market. 

But  the  Germans  and  Americans  are  not  the 
only  people  who  understand  the  value  of  co-opera- 
tion in  pushing  foreign  trade.  Wherever  we  turn 
abroad,  this  idea  seems  to  have  found  a  greater  degree 
of  acceptance  than  it  has  in  Great  Britain.  Sweden 
is  a  very  good  example  of  successful  co-operation 
for  the  purposes  of  export.  There  is  a  General 
Export  Association  of  Sweden,  as  well  as  a  large 
number  of  specialised  bodies,  the  most  active  of 
which  is  probably  the  Swedish  Wood  Export  Asso- 
ciation, which  practically  controls  the  great  trade 
that  Sweden  does  in  timber,  paper,  and  paper- 
making  materials. 

Canada  can  also  claim  to  set  an  example  in  this 
way.  The  Export  Association  of  Canada  is  one 
of  a  number  of  bodies  that  are  founded  upon  this 


,-p^ 


ll 


198        THE  TRADE  OF  TO-MORROW 

idea.  Its  objects  are  to  secure  detailed  informa- 
tion and  actual  orders  for  its  members,  to  introduce 
representatives  of  Canadian  firms  to  the  most 
important  buyers  of  other  markets,  to  collect 
and  make  shipments  of  export  orders,  and  where 
possible  to  finance  the  same.  The  Association 
has  already  opened  offices  in  different  parts  of  the 
world,  and  arrangements  are  being  made  for  estab- 
lishing large  sample  rooms  in  important  centres. 
It  was  responsible  for  an  interesting  exhibit  of  the 
products  of  its  members  at  the  Lyons  Fair.  It 
is  also  establishing  machinery  for  the  sale  of  Canadian 
goods  in  markets  as  far  removed  as  Siberia. 

Co-operative  export  trading  is  beginning  to  be 
understood  in  Great  Britain,  and  quite  a  number 
of  trade  associations  are  debating  the  matter. 
For  instance,  the  National  Leather  Goods  Manu- 
facturers' Association  has  before  it  a  scheme 
whereby  the  members  of  the  association  would 
combine  to  send  out  to  the  markets  of  the  world 
an  exhibition  of  British-made  leather  goods  over 
a  given  period  in  certain  selected  centres. 

But  the  loosely  formed  voluntary  trade  associa- 
tions, which  are  all  that  we  possess  at  the  moment, 
are  necessarily  badly  handicapped  in  any  scheme 
of  this  kind,  and  success  is  only  to  be  achieved  in 
those  rare  cases  where  self-sacrificing  individuals 
are  prepared  to  take  the  whole  responsibility  upon 
their  shoulders.  Opinion  in  every  trade  is  ripe  for  a 
scheme  of  combined  action,  and  the  opportunity  for 
the  Government  to  institute  such  a  plan  is  unique. 


EXPORT 


199 


"  We  all  have  some  advantages  over  one  another," 
said  the  late  Mr.  Arthur  Chamberlain,  "  and  we  had 
much  better  put  all  these  advantages  together,  and 
pit  our  combined  best  against  a  foreign  country. 
If  we  do  that  we  shall  then  constitute  a  better  whole 
than  either  Germany  or  America." 

As  with  most  present-day  problems,  the  Govern- 
ment is  endeavouring  to  do  something  in  the  matter, 
and,  as  is  almost  always  the  case,  they  are  building 
from  the  top,  working  from  a  central  department, 
and  attempting  the  impossible.  The  Foreign  Office 
has  awakened  to  the  need  for  improvement  in  oiu: 
export  machinery,  and  has  consequently  made  a 
bargain  with  the  Chambers  of  Commerce  for  the 
better  collection  and  use  of  Consular  information. 
The  Consular  Service  is  to  be  strengthened,  and 
Consular  Reports  are  to  be  circulated  with  greater 
promptitude  through  Chambers  of  Commerce. 
Special  forms  are  to  be  available  for  members 
of  Chambers  of  Commerce  who  will  be  able  to  state 
what  are  their  requirements,  and  Consuls  will 
endeavour  to  fill  those  needs. 

This  display  of  energy  on  the  part  of  the  Foreign 
Office  is  much  to  be  regretted,  as  it  represents  the 
patching  up  of  a  system  which,  as  I  have  tried  to 
show,  is  thoroughly  bad  in  principle.  British  Trade 
will  never  reach  its  required  dimensions  so  long  as 
the  information  and  the  assistance  given  to  it  is 
that  collected  by  Consuls  and  officials  of  Chambers 
of  Commerce,  all  of  them  excellent  and  well- 
meaning  persons,  but  none  of  them  experienced  in 


.-fT 


200 


THE  TRADE  OF  TO-MORROW 


particular  trades.  It  is  imperative  that  we  should 
learn  from  the  Germans  and  the  Americans  in  these 
matters,  and  decide  that  every  trade  shall  be  dealt 
with  separately  and  given  its  own  machinery  for 
dealmg  with  each  foreign  market. 

The  labour  problem  and  every  other  problem  wiU 
m  the  end  depend  upon  proper  distributing  and  sell- 
mg  arrangements  abroad.  It  is  useless  to  increase 
output,  to  improve  machinery,  or  add  to  our  pro- 
ductive capacity  unless  we  have  the  proper  facilities 
for  the  disposal  of  our  productions.  In  this  matter 
of  distnbution  we  have  one  of  the  weakest  Unks  in 
the  Bntish  commercial  chain. 

My  suggestion  is,  therefore,   that  every  Trade 
Council  should  have  as  one  of  its  duties  the  work  of 
promoting   foreign   trade   in   the   products   of  its 
industry.    Each  Council  will  thus  find  it  necessary 
to    appoint    an  Export    Committee    and   Export 
Officers,  and  to  amass  for  its  use  aU  the  statistics 
and  information  that  are  available  with  regard  to 
Its  industry.    When  that  is  done,  trade  statistics 
and  commercial  information  will  assume  a  new  signi- 
ficance.    They  will  be  prepared  by  experts  who  know 
what  IS  wanted  ;    they  will  differentiate  between 
classes  of  goods  and  grades  of  materials  ;   they  will 
be  of  real  value  to  the  business  man.     The  Export 
Officers  of  each  Trade  Council  will  be  responsible 
for  the  proper  representation  of  that  trade  in  every 

™!,  uu^*''"  '^°'^^-  Co-operative  advertising 
and  exhibition  schemes  in  foreign  markets  wiU 
become  the  order  of  the  day.     Those  readers  who 


EXPORT 


201 


had  the  opportunity  of  visiting  the'last  few  Inter- 
national Exhibitions  will  be  aware  that  by  far  the 
best  exhibits  at  Brussels,  Ghent,  and  Turin  were 
those  arranged  on  co-operative  lines  by  the  Society 
of  Motor  Manufacturers  and  Traders,  the  Publishers, 
the  Textile  Printers,  and  other  organised  bodies. 

To  sum  up  this  question  of  export,  the  position  is 
that  American  trusts  have  done  extremely  well, 
that  German  cartels  have  done  better,  and  that 
British  co-operation,  if  it  can  be  brought  about,  will 
do  best. 


Ill 


m^ 


SUNDRY  QUESTIONS 


203 


CHAPTER  XIX. 

SUNDRY  QUESTIONS. 

The  number  of  questions  which  might  be  considered 
m  connection  with  the  study  of  the  development  of 
trade  is  legion.  There  is  Uterally  no  end  to  them, 
which  fact  is  the  strongest  argument  of  all  for  the 
adoption  of  a  bold  scheme  of  devolution^and  the 
setting  up  of  numerous  Uttle  authorities'"  so  that 
all  these  things  may  be  decentralised. 

For  instance,  we  have  so  far  said  nothing  about 
the  development  of  the  Empire,  the  arrangements 
that  will  undoubtedly  be  made  for  facilitating  trade 
within  the  Empire,   the    need  for  becoming  self- 
supporting  with  regard  to  certain  raw  materials  and 
key  industries.     It  will,  however,  be  obvious  that 
these  problems  are   much  more  likely  to  find  a 
satisfactory  solution  when  we  ourselves  are  organised 
at  home.     It  is    altogether    characteristic  of  the 
Bntish  way  of  doing  things  that  our  statesmen 
should  be  inviting  us  to  make  orderly  arrangements 
with  regard  to  trade  covering  half  the  globe,  while 
we  are  in  a  condition  of  chaos  so  far  as  the  trade  of 
this  httle  island  is  concerned. 


202 


To  take  a  concrete  example,  let  us  suppose  that 
some  American  trade  has  secured  too  much  of  a 
foothold  in  the  Australian  market.  It  is,  therefore, 
proposed  to  make  some  arrangements  for  tariffs, 
or  shipping  rates  or  subsidies,  in  order  to  divert  that 
trade  within  the  Empire.  Such  arrangements  as 
these  are  definitely  suggested  by  leading  statesmen. 
It  will  be  seen  at  once  that  any  such  scheme  cannot 
be  carried  out  with  the  maximum  success  until  the 
home  industry  concerned  is  so  organised  as  to  be 
in  a  position  to  express  an  opinion  and  give  expert 
advice  upon  the  matter. 

We  have  avoided  any  reference  to  retail  organisa- 
tions. This  is  a  subject  by  itself,  yet  very  closely 
related  to  that  of  manufacturing  organisations.  The 
principles  underlying  both  are  the  same.  It  is 
obvious  that  if  the  State  were  to  set  up  a  system  of 
Statutory  Trade  G)uncils,  that  system  would  have 
to  embrace  every  form  of  trading,  manufacturing, 
wholesaling  and  retailing.  The  retail  associations 
that  would  grow  up  in  this  way  would  constitute 
a  very  useful  check  upon  manufacturing  associations. 

Then  there  is  a  whole  series  of  professional  and 
semi-professional  associations.  It  will  be  seen  in 
the  recommendations  set  out  in  our  last  chapter 
that  we  ask  for  a  trading  franchise,  which  must,  of 
course,  be  also  a  professional  franchise.  Every 
man  is  to  have  a  vote  according  to  his  trade.  In 
this  way,  whatever  may  be  the  form  of  each  man's 
activities  he  will  secure  a  right  to  a  vote  in  some 
statutory  association.     The   system  must  be  uni- 


m 


204        THE  TRADE  OF  TO-MORROW 

versal  in  its  application,  and  it  would  have  the  effect 
of  making  not  only  trade  unions  and  trade  associa- 
tions, but  retail  bodies  and  professional  societies 
absolutely  representative  in  their  character. 

It  would  cover,  for  example,  Banking,  and  would 
give  us  an  official  Bankers'  Council  with  statutory 
obligation  to  provide  the  nation  with  such  banking 
faciHties  as  were  required,  and  would  remove  the 
need  for  the  Government  to  dabble  in  banking  in  the 
way  that  it  has  recently  done  with  the  British  Trade 
Corporation,  a  very  necessary  and  useful  institution 
of  that  half-baked  variety  to  which  we  seem  to  be 
committed  in  this  country.     The  mere  statement  of 
the  fact  that  it  is  to  have  a  capital  of  ten  millions, 
that  it  must  not  commence  business  until  at  least 
^250  000  has  been  actually  paid  up,  is  quite  sufficient 
to  show  how  inadequate  it  is  to  deal  with  the  vast 
needs  of  the  future  development  of  British  industry 
There  is  another  great  subject  that  should  be 
explored  did  space  permit.    Exhibitions  and  adver- 
tising, when  we  come  to  deal  with  whole  trades 
assume  an  importance  that  has  not  been  previously 
realised.    The  duties  of  the  nation  in  the  matter 
of  foreign  exhibitions  was  recognised  in  a  small  way 
by  the  estabhshment  of  the  Exhibitions  Branch  of 
the  Board  of  Trade.    Under  a  Minister  of  Commerce 
supported  by  the  numerous  Trade  Councils,   the 
Bntish  nation  could  go  out  into  the  world  with 
exhibitions  worthy  of  British  industry. 

It  is  useless  to  speculate  how  much  better  we 
should  have  been  prepared  for  war  had  trade  been 


SUNDRY  QUESTIONS 


205 


organised  before  1914.  There  can  be  little  doubt 
that  our  enemies  have  obtained  great  advantages 
over  us  from  the  facility  with  which  they  were  able 
to  summon  to  their  aid  whole  industries,  and  use, 
instead  of  improvised  Directors  and  Controllers,  the 
trained  officers  of  German  cartels  for  national 
purposes. 


y 


>_^ 


A  TRADE  ELECTION 


207 


CHAPTER  XX. 
A    TRADE  ELECTION. 

It  is  always  very  difficult  to  foretell  exactly  what 
the  results  of  a  new  scheme  may  be,  and  it  is  more 
than  usually  difficult  to  prophesy  when  the  subject 
is  connected  with  trade  and  industry,  markets  and 
futures.  My  contention  is  that  the  interest  in  a 
trade  which  would  be  created  by  a  statutory  power 
like  the  proposed  Trade  Council,  and  the  bringing 
together  of  the  leaders  of  that  trade  for  mutual 
discussion  and  common  action,  must  lead  to  better- 
ment and  progress.  But  there  is  at  least  one  detail 
in  my  proposals  about  which  one  can  prophesy  with- 
out much  fear  of  error  and  with  a  very  fair  amount 
of  certainty. 

It  is  suggested  that  each  trade  should  be  provided 
with  a  statutory  Council  elected  like  our  local 
authorities  and  holding  office  for  a  period  of,  say, 
three  years.  This  Council  would  be  elected  by  the 
various  trade  associations  and  trade  unions  interested 
in  one  industry.  The  triennial  election  of  the  Trade 
Council  would  focus  all  the  many  questions  affecting 
the  trade  and  give  an  opportunity  to  everybody  with 
views  on  the  development  or  .betterment  of  that 
trade  to  come  into  the  open  and  have  his  schemes 

206 


discussed.  The  mere  fact  of  holding  an  election  in 
the  Furniture  Trade  would  bring  out  every  idea  for 
improvement  and  progress,  and  would  cause  a 
general  discussion  of  trading  problems  which  must 
have  a  powerful  influence  for  good  upon  the  trade 
as  a  whole  and  each  individual  member  of  it. 

We  therefore  propose  to  indulge  in  a  little 
prophecy,  and  endeavour  to  describe  the  proceedings 
at  an  election  of  the  Furniture  Trade  Coxmcil. 

We  will  imagine  that  every  furniture  man  is  a 
registered  voter  for  this  purpose,  and  that  the  Furni- 
ture Trade  Council  has  been  in  existence  for  a  period 
of  three  years,  and  that  we  are  now  engaged  upon 
the  second  triennial  election  to  that  body.  In  order 
to  make  the  prophecy  more  complete  in  detail,  we 
will  asstune  that  the  trade  franchise  and  the  system 
of  election  have  been  settled  on  the  following  lines. 

Every  furniture  man  has  the  right  of  a  voting 
membership  of  one  of  the  trade  associations  or  trade 
unions.  We  will  assume  that  there  are  fifty-nine 
seats  on  the  Furniture  Trade  Council,  this  number 
of  fifty-nine  having  been  agreed  as  convenient  in 
order  to  provide  sufficient  members  to  undertake 
all  the  numerous  Conmiittee  duties  that  fall  within 
the  scope  of  the  Council.  Of  these  fifty-nine 
members,  twenty-four  are  delegates  from  trade 
associations,  twenty-four  are  delegates  from  trade 
unions,  and  the  balance  of  eleven  are  aldermen 
elected  by  the  Council  on  the  nomination  of  various 
authorities :  two  are  men  of  science  nominated 
by  the  Industrial  and  Scientific  Research  Depart- 


f' 


2o8        THE  TRADE  OF  TO-MORROW 

ment ;  two  are  educational  experts  nominated  by 
the  Board  of  Education  ;  one  is  a  financial  expert 
nominated  by  the  Bankers'  Trade  Council.  A  legal 
expert  from  the  Law  Society,  a  statistical  expert 
from  the  Board  of  Trade,  and  a  health  expert  from 
the  Mmistry  of  Health  complete  what  may  be  de- 
scribed as  the  official  element  in  the  Council.  There 
are  also  a  Deputy-Chairman  and  a  Vice-Chairman 
elected  by  the  Council  on  the  nomination  of  the 
Ministry  of  Commerce,  and  a  President,  who  is  elected 
by  the  whole  body  of  Councillors  and  Aldermen. 

The  twenty-four  delegates  from  trade  associations 
are  elected :— Fourteen  by  the  National  Wholesale 
Furniture  Manufacturers'  Association  :   six  by  the 
Furnishers'  Chamber  of  Trade  :  two  by  the  Furnish- 
ing Section  of  the  Chamber  of  Commerce ;  two  by 
the  Cabinet  Trades'  Federation  :    these  being  the 
proportions  due  to  those  bodies  reckoned  by  the 
strength    of    their    respective    membership.     The 
twenty-four  delegates  from  trade  unions  are  elected 
m  a  similar  way  by  the  various  unions  interested 
in  the  furniture  trade,  the  numbers  being  allocated 
m  proportion  to  the  strength  of  membership. 

This  Council  has,  then,  been  working  for  a  period 
of  three  years,  and  having  completed  its  statutory 
term,  has  to  seek  the  suffrages  of  its  constituents. 
In  order  thoroughly  to  appreciate  exactly  what 
will  now  happen,  the  reader  should  take  an  oppor- 
tumty  of  inspecting  the  post  bag  of  a  Member  of 
Parhament  for,  say,  three  consecutive  mornings. 
He  will  then  be  in  a  better  position  to  understand 


A  TRADE  ELECTION 


209 


the  full  significance  of  the  introduction  of  a  system 
of  election  into  an  industry  like  the  Furniture 
Trade.  Many  hundreds  of  tons  of  literature  which 
is  now  deUvered  annually  to  Members  of  Parhament 
and  candidates  for  Parliament  would  be  diverted, 
and  delivered  instead  to  members  and  candidates 
for  the  various  Trade  Councils. 

A  great  saving  and  a  great  improvement  would 
be  introduced  merely  in  this  way.  There  are  many 
hundreds  of  societies  with  excellent  objects  who 
have  no  means  of  carrying  those  pbjects  into  effect 
except  by  the  almost  useless  method  of  worrying 
Members  of  Parhament  about  them.  Seeing  that 
most  of  the§e  subjects  are  of  no  interest  to  Members 
of  Parliament,  or  at  least  that  Members  of  Parhament 
,have  no  interest  in  them  and  understand  httle  or 
nothing  about  them,  the  waste  of  effort  in  good 
causes  in  this  way  alone  is  enormous.  All  these 
propagandists  will  now  be  able  to  approach  the  right 
people  in  the  numerous  trade  elections  that  will  be 
held.  When  the  candidate  for  Council  honours  in  the 
Furniture  Trade  opens  his  post  the  morning  after 
nomination,  he  will  find  something  like  the  following. 

The  Society  for  the  Introduction  of  the  Metric  or 
Decimal  System  will  send  him  specimens  of  their 
literature  and  invite  him  to  pledge  himself  to  an 
alteration  of  those  mediaeval  methods  which,  accord- 
ing to  their  view,  hamper  our  progress  in  foreign 
markets.  There  will  be  some  interesting  light 
reading  to  keep  the  candidate  busy  for  hours,  enter- 
ing deeply  into  arithmetical  matters  which  will 


i' 


210        THE  TRADE  OF  TO-MORROW 

probably  be  quite  beyond  his  range.  A  Uttle  further 
down  in  his  post  bag  he  will  find  another  letter  from 
another  Society  who  will  tell  him  that  the  British 
system  of  weights  and  measures  is  based  on  the 
measurements  of  the  earth  and  the  Pyramids,  that 
it  has  in  fact  divine  origin,  and  that  no  vandal  must 
be  allowed  to  interfere  with  it.  It  will  be  pointed  out 
that  the  cost  of  the  alteration  would  be  enormous, 
that  it  would  undermine  the  whole  of  our  industrial 
structure,  and  that  no  benefit  could  possibly  accrue. 

The  Union  of  Clerks  and  Shop  Assistants  will  then 
seek  the  attention  of  the  Trade  Council  candidate, 
and  will  ask  for  permission  to  wait  upon  him  in 
deputation  in  order  to  explain  their  objection  to 
the  system  prevaiHng  in  the  furniture  trade  in  the 
north,  and  to  ask  him  whether  he  will  pledge  himself 
to  vote  for  the  universal  application  of  the  London 
system  to  the  whole  of  the  trade.  If  he  is  prepared 
to  take  that  view,  the  Union  of  Clerks  and  Shop 
Assistants  will  pledge  themselves  to  support  his 
candidature.  If  not,  he  will  be  threatened  with  the 
dire  penalty  of  being  pubHshed  in  their  black  list. 

The  Incorporated  Society  of  Secretaries  will 
call  attention  to  the  prevalence  in  the  furniture  trade 
of  the  practice  of  employing  clerks  without  qualifica- 
tions as  secretaries  of  limited  companies,  and  demand 
action  by  the  Council. 

The  Early  Closing  Association  will  point  out  that 
the  furniture  trade  is  one  of  the  worst  offenders  in 
the  matter  of  shop  hours,  and  that  they  have  already 
secured  an  undertaking  from  the  Drapery  Trade 


A  TRADE  ELECTION 


211 


I'M 


Council  that  if  the  Furniture  Trade  Council  will 
enact  the  closing  of  retail  estabhshments  half  an 
hour  earUer  on  Wednesdays,  the  Drapery  Trade 
Council  will  follow  suit.  As  the  two  trades  cater 
for  the  public  in  kindred  ways,  uniformity  of  action 
between  them  is  essential. 

The  Workers'  Educational  Association  will  send 
a  really  big  parcel  of  hterature  and  will  call  the 
attention  of  the  candidate  to  the  very  little  that  is 
done  by  the  Fimiiture  Trade  Council  in  the  way  of 
endowment  of  exhibitions  and  scholarships.  If  the 
candidate  will  sign  the  enclosed  form  and  undertake 
to  support  the  aims  and  objects  of  the  Workers' 
Educational  Association,  that  body  will  in  return 
print  and  circulate  to  the  whole  of  the  electorate 
special  Hterature  inviting  support  to  his  candidature. 

A  communication  will  next  be  received  from  the 
Shipping  Trade  Council,  which  will  ask  the  candidate 
to  express  his  views  as  to  action  which  they  propose 
to  take  in  order  to  bring  the  Railway  Companies 
to  heel  in  connection  with  through  bookings  for 
small  consignments  via  the  Panama  Canal. 

The  Home  Rule  for  India  League  will  also  write 
to  the  candidate  and  send  him  a  lengthy  pamphlet, 
entitled  "  India's  Appeal  to  Canada,"  pointing  out 
that  the  furniture  trade  in  Canada  by  means  of  the 
importation  of  Hindu  labour  is  securing  an  advan- 
tage at  the  expense  of  the  furniture  trade  in  other 
parts  of  the  Empire,  and  inflicting  injustice  and 
wrong  upon  India.  The  candidate  will,  therefore, 
be  invited  to  use  his  influence  if  elected  to  the  Fumi- 


,1 


ll 


r 


r  ■»;'"*. 


212        THE  TRADE  OF  TO-MORROW 

ture  Trade  Council,  to  bring  the  Canadian  furniture 
people  to  reason  in  this  important  matter. 

To  the  ordinary  reader,  this  weary  catalogue  of  a 
single  morning's  post  received  by  the  candidate  for 
the  Furmture  Trade  Council  may  seem  fantastic 
but  those  who  have  any  experience  of  the  corres- 
pondence of  a  pubhc  man  will  agree  that  the  descrip- 
tion IS  not  only  true,  but  that  the  nature  and  variety 
of  the  subject  matter  are  understated  and  under- 
estimated. 

So  far  we  have  merely  dealt  with  general  public 
questions,  many  of  them  of  great  importance  and 
upon  which  these  Trade  CouncOs  may  have  a  very 
direct  and  practical  influence.  If,  however,  Trade 
Councils  were  to  be  established  merely  in  order  to 
reheve  Members  of  Pariiament  of  the  attentions  of 
these  numerous  excellent  societies,  httle  could  be 
said  in  support  of  them. 

The  candidate  for  the  Furniture  Trade  Council 
will,  of  course,  have  his  life  worried  out  of  him  by 
people  with  ideas,  schemes,  and  grievances  in  connec- 
tion  with   the   trade   itself.    A   single   morning's 
postal  communications  of  the  candidate  under  dis- 
cussion  will,  in   addition   to  the   general   matter 
mentioned  above,  be  something  hke  the  following. 
The  Wycombe   Chair  Makers  will  write   to  call 
attention  to  the  absurdly  antiquated  samples  of 
furmture  installed  at  Woolwich  by  the  War  Office 
and  the  stupidity  of  that  body  in  insisting  upon 
present-day   suppUes   being   made   to   out-of-date 
patterns.     They  will   point   out   that  if   the  War 


A  TRADE  ELECTION 


213 


Office  would  only  take  advantage  of  modem  methods 
of  manufacture  and  instal  machine-made  samples 
and  invite  tenders  for  machine-made  goods,  a  lot  of 
expense  would  be  saved  to  the  nation.  The  candi- 
date will  be  asked  whether  he  will  pledge  himself 
to  agitate  through  the  Trade  Council  and  the 
Ministry  of  Commerce  for  an  alteration  in  the 
procedure  of  the  War  Office. 

The  Furnishing  Trades'  Benevolent  Association 
will  write,  pointing  out  that  the  income  of  the  Charity 
is  altogether  inadequate  to  deal  with  the  demand  for 
p)ensions  and  places  in  the  Orphanage,  and  suggesting 
that  the  F.T.C.  should  be  empowered  to  make  a 
grant  from  public  fimds  of  £2,000  a  year  to  form  a 
fixed  income  which  would  enable  them  to  carry  on 
their  work  with  a  greater  degree  of  security  and 
success.  The  Benevolent  Association  would  offer 
the  nomination  of  six  places  on  their  Executive 
Committee  in  return  for  this  grant,  and  invite  the 
candidate  to  move  in  the  matter  in  the  new  Council. 

The  Midland  Committee  will  write  to  call  atten- 
tion to  the  abuses  which  exist  in  consequence  of  the 
practice  that  has  grown  up  of  builders  imdertaking 
cabinet  work,  and  enclose  a  number  of  rules  which 
they  suggest  should  be  adopted,  defining  the  limits 
of  the  activities  of  builders  in  interior  woodwork. 

The  Retail  Section  of  the  Furnishers'  Chamber  of 
Trade  will  send  to  the  candidate  a  manifesto  object- 
ing to  the  practice  adopted  by  certain  manufacturers 
of  selling  surplus  stocks  through  auction  sales,  and 
asking  the  Trade  Council  to  legislate  on  the  matter. 


''Il 


mWwmm 


214        THE  TRADE  OF  TO-MORROW 

A  communication  from  Mr.  S.  J.  Waring  will 
be  the  next  to  be  opened,  in  which  he  wiU  announce 
his  mtention  of  organising  a  great  national  campaign 
on  the  subject  of  art  and  economy.  Mr.  Waring 
will  point  out  how  the  union  of  art  and  economy 
would  bring  happiness  to  the  homes  of  the  miJhon 
while  mcidentally  benefiting  the  furniture  trade' 
He  will  suggest  that  the  Furniture  Trade  Council 
should  adopt  the  subject  and  undertake  this  great 
work  m  its  official  capacity,  his  theory  being  that 
if  the  pubhc  interest  could  be  aroused  to  a  due  sense 
of  the  importance  of  surrounding  each  citizen  with 
things  of  beauty,  the  moral  and  intellectual  tone  of 
the  nation  would  be  greatly  improved. 

The  Design  and  Industries'  Association  will  ask 
the  candidate  to  agree  with  them  that  most  of  the 
furmture  which  is  made  violates  all  artistic  principles 
and  they  will  also  demonstrate  that  a  simplification 
of  design  would  not  only  add  to  artistic  values  but 
reduce  costs  of  manufacture.  They,  therefore,  ask 
for  the  right  to  nominate  three  aldermen  on  the' new 
Trade  Council  to  promote  these  objects. 

The  Society  of  Polishers  will  address  to  the  candi- 
date a  manifesto  asking  for  a  re-arrangement  of  the 
constitution  of  the  Workshop  Committees  in  the 
factones  of  the  trade,  pointing  out  that  poUshers  in 
proportion  to  their  importance  and  numerical 
strength,  are  not  properly  represented  on  these 
Committees. 

The  Chair  Makers'  Union  will  ask  the  candidate 
to  support  a  recommendation  that  the  trade  should 


A  TRADE  ELECTION 


215 


adopt  the  Unemployment  Section  of  the  Insurance 
Act.  The  Carvers'  Society,  on  the  other  hand,  will 
send  a  strong  protest,  threatening  to  vote  against 
the  candidate  unless  he  will  undertake  to  oppose 
by  every  means  in  his  power  the  imposition  of 
Unemployment  Insurance  upon  the  Furniture  Trade. 

There  will  then  be  a  whole  series  of  communica- 
tions from  interested  parties  on  the  never  ending 
subject  of  railway  rates,  and  each  will  send  remark- 
able specimens  of  inequalities  and  call  for  emenda- 
tions in  the  classification  of  different  articles. 

Next  there  will  be  a  dozen  or  so  letters  and 
memoranda  from  people  interested  in  alterations  in 
the  tariff,  either  here  or  in  the  Colonies  of  in  foreign 
countries. 

An  enthusiast  will  write  and  invite  the  candidate's 
attention  to  a  scheme  for  the  establishment  of  a 
co-operative  insurance  office  within  the  furniture 
trade,  and  will  give  figures  to  show  what  large  sums 
are  annually  paid  by  this  trade  for  the  simple  pur- 
pose of  swelling  the  dividends  of  Fire-insurance 
Companies. 

The  candidate  will  next  be  invited  to  devote  his 
attention  to  the  intricate  question  of  Profit-Sharing 
in  its  application  to  furniture  manufacture. 

The  Society  for  the  Promotion  of  Public  Health 
will  circularise  the  candidate  and  give  him  informa- 
tion and  figures  on  the  subject  of  lung  trouble  in  the 
bedding  department  of  the  furniture  trade,  and  ask 
him  to  support  the  regulations  which  they  suggest 
for  the  elimination  of  this  evil. 


2i6        THE  TRADE  OF  TO-MORROW 

There  will  then  be  communications  from  the  Hire 
Traders'  Protection  Association,  seeking  the  in- 
fluence of  the  Furniture  Trade  Coimcil  to  amend 
the  law  of  distraint,  so  that  they  may  the  better  be 
able  to  enforce  the  payment  of  instalments  imder 
hire  purchase  agreements.  And  to  balance  these 
will  be  letters  from  those  who  take  the  view  that 
purchase  on  the  instalment  plan  is  an  immoral 
proceeding,  and  that  the  Furniture  Trade  Council 
ought  to  use  its  powers  to  get  rid  of  it. 

If  the  reader  by  this  time  is  not  thoroughly  weary 
of  the  catalogue,  there  is  a  great  deal  more  to  go 
through  before  we  have  exhausted  the  morning's 
post  of  the  candidate  for  election  to  the  Fiuniture 
Trade  Council.  We  have  so  far  dealt  with  two  sets 
of  subjects  covering  questions  that  are  at  present 
before  the  public  and  the  trade.  The  first  are 
matters  of  general  public  interest :  the  second 
matters  of  more  particular  trade  interest.  But  there 
is  still  a  third  batch  of  subjects  which  have  only 
come  into  the  region  of  practical  pohtics  since  the 
establishment  of  the  Furniture  Trade  Council,  for, 
be  it  remembered,  we  are  now  discussing  the  second 
triennial  election  of  that  body. 

The  candidate  will,  therefore,  have  to  withstand 
a  terrific  bombardment  from  folk  who  are  suffering 
under  a  sense  of  grievance  from  the  actions  of  the 
previous  Council,  and  those  who  are  full  of  new 
schemes  for  the  betterment  and  advancement  of  the 
industry.  The  next  batch  of  letters  will  therefore 
contain  communications  of  the  following  kind. 


A  TRADE  ELECTION 


217 


The  Gloucester  Committee  will  call  attention  to 
the  inadequacy  of  the  Bristol  University's  technical 
education  in  its  application  to  furniture,  and  point 
out  how  badly  handicapped  is  the  West  of  England 
in  this  respect  as  compared  with  Yorkshire  and 
Lancashire,  the  technical  schools  under  the 
Manchester,  Leeds,  and  Sheffield  Universities  being, 
in  each  case,  far  superior  to  those  installed  at  Bristol. 
The  candidate  will  be  required  to  pledge  himself 
to  bring  the  subject  before  the  Education  Committee 
of  the  F.T.C.,  and  not  rest  until  that  Committee  has 
persuaded  the  Education  Officer  and  the  Ministry  of 
Commerce  to  move  in  the  matter. 

A  Sheffield  elector  will  point  out  that  the  instructor 
in  Cabinet  Making  at  the  local  Technical  School, 
although  he  holds  a  lot  of  South  Kensington  certifi- 
cates, is  not  a  practical  man,  has  never  been  at  the 
bench,  and  is  consequently  not  fitted  for  the  post. 
The  candidate  will  be  urged  to  see  that  all  such 
appointments  are  given  to  men  of  actual  experience. 

Some  bright  brain  will  then  unfold  to  the  candi- 
date a  scheme  for  the  co-operative  use  of  railway 
trucks,  framed  on  Mr.  Sidney  Webb's  well-known 
plan  for  reducing  the  expenses  on  the  transport 
of  coal,  while  another  expert  will  demand  the  estab- 
lishment of  a  Furniture  Trade  Motor  Service,  point- 
ing out  that  in  this  way  a  special  type  of  vehicle 
suited  to  the  peculiar  requirements  of  fumitm'e 
could  be  introduced,  and  much  expense  in  packing 
and  breakages  thus  avoided. 

But  the  serious  part  of  the  candidate's  work  will 


I 


W 


!ii 


!l 


K*^" 


2i8        THE  TRADE  OF  TO-MORROW 

begin  when  he  is  invited  to  inquire  into  the  delin- 
quencies of  the  Furniture  Trade  Commissioner 
in  Egypt,  delinquencies  which  are  proved  by  the 
fact  that  the  trade's  exports  to  Egypt  are  only  one- 
third  in  value  of  those  to  Nigeria.  This  poor  result 
will  be  attributed  to  the  fact  that  the  Egyptian  Com- 
missioner was  appointed  without  due  care,  that  his 
previous  experience  and  training  did  not  fit  him  for 
the  job,  and  a  change  should  therefore  be  made. 

An  export  enthusiast  will  call  attention  to  the 
utter  inadequacy  of  the  State  grant  of  2s.  6d.  per 
;f loo  which  was  secured  by  the  late  Council  for  the 
encouragement  of  export.  He  wil)  point  out  that 
this  sum|only  produces  ;f  1,500  per  annum,  and  that 
that  amoimt  of  money  requires  multiplying  many 
times  in  order  to^'provide  a  sufficiently  large  and 
expert  staff  to  look  after  the  interests  of  the  trade  in 
foreign  markets.  He  will,  therefore,  suggest  that 
the  Treasury  should  be  approached  with  a  \dew 
to  raising  the  grant  to  3s.  6d.  per  £100,  and  that  a 
levy  should  be  made  upon  the  trade  for  a  further 
3s.  6d.  per  £100,  so  that  the  Council  might  have  at 
least  £4,000  or  £5.000  a  year  to  spend  in  propaganda 
work  abroad. 

Another  communication,  from  North  of  the 
Tweed,  will  complain  of  the  imfair^ allotment  of 
space  in  the  Travelling  Exhibition  of  Furniture 
Samples  which  the  F.T.C.  had  sent  round  the  world, 
and  demand  that  in  future  in  arrangements  of  this 
kind  space  should  be  divided  on  a  territorial  basis 
instead  of  a  capital  basis.     Under  such  a  system  of 


A  TRADE  ELECTION 


219 


division  Scotland  would  secure  one-fifth  of  the 
available  accommodation  instead  of  only  one-seventh 
which  was  allotted  to  it  under  the  capital  method. 

A  manufacturer  in  Manchester  will  object  to  the 
arrangements  made  by  the  Furniture  Trade  Council 
for  a  subsidy  to  the  Central  Industrial  Research 
Institution,  and  insist  that  the  Fmrniture  Trade  is 
of  sufficient  importance  to  warrant  a  research  staff 
and  building  of  its  own,  and  point  out  the  additional 
expense  thus  incurred  would  be  more  than  rewarded 
by  the  benefits  that  would  accrue  to  the  industry. 

Another  highly  technical  and  controversial  matter 
to  which  the  candidate  will  have  to  give  his  atten- 
tion will  be  the  Secondary  Education  scheme  now 
in  operation,  under  which  youths  from  foiuleen 
to  eighteen  are  compelled  to  attend  a  technical 
school  at  specified  times.  The  instruction  given, 
the  hours  arranged,  the  instructors  employed,  and 
many  kindred  matters  will  all  come  under  review. 

Innumerable  argimaents  will  next  be  put  forward 
for  an  emendation  of  the  official  costing  system, 
and  the  candidate  will  be  invited  to  acquaint  himself 
with  figures  to  prove  that  the  official  estimate  of 
warehouse  charges  at  20  per  cent,  is  far  too  high  or 
far  too  low,  while  7J  per  cent,  for  overhead  charges 
is  out  of  all  reason. 

To  exhaust  the  post  of  the  candidate  we  should 
have  to  wade  through  a  great  many  more  letters. 
OneTmore  only  must  be  mentioned,  which  comes 
from  the  National  Standardisation  Committee, 
offering  the  candidate  their  support  if  he  will  move 


II 


220        THE  TRADE  OF  TO-MORROW 

for  the  appointment  of  a  Standardisation  Committee 
of  the  Furniture  Trade  Council,  and  pointing  out 
how  the  adoption  of  the  principles  which  have  saved 
the  British  Engineering  Industry  would  also  tend 
to  great  economies  and  greater  efl&ciency  in  the 
manufacture  of  furniture. 

This  hst  speaks  for  itself.  To  the  reader  who  is 
not  deeply  interested  in  the  progress  of  industry  it 
may  appear  to  be  composed  of  a  lot  of  minor  matters, 
but  to  any  experienced  manufacturing  man  who  will 
read  it  with  the  necessary  amount  of  imagination, 
it  will  open  up  vast  possibiUties,  possibiUties  which 
cannot  be  reahsed  until  we  find  some  way  of  making 
the  study  of  the  fmniture  trade  and  every  other 
trade  a  matter  of  necessity  to  those  concerned  in  it. 

The  effect  of  such  an  election  campaign  as  we  have 
described  would  be  to  decentrahse  all  sorts  of 
important  questions,  and  bring  them  before  the 
attention  of  men  who  have  the  experience  and  the 
power  to  deal  with  them.  But  it  would  do  a  great 
deal  more  than  that.  It  would  awaken  general 
interest  in  the  welfare  of  the  furniture  trade.  It 
would  teach  every  member  of  that  trade  a  great  deal 
about  it  of  which  he  was  not  previously  aware.  It 
would  turn  every  furniture  man  from  an  amateur 
into  an  expert,  because  it  must  never  be  forgotten 
that  under  the  individualistic  system  we  are  all  of 
us  amateurs.  We  are  struggling  on  with  our  par- 
ticular branch  of  business  with  the  advantage  of  such 
experience  as  we  have  been  able  to  pick  up  within 
the  four  walls  of  our  own  shop,  but  we  have  never 


A^TRADE  ELECTION 


221 


had  the  advantage  of  full  discussion  of  all  our 
problems  by  all  those  engaged  in  a  similar  way. 

The  introduction  of  the  franchise  and  of  a  system 
of  election  to  Trade  Coimcils  will  have  another  very 
important,  indeed,  a  revolutionary,  effect.  It  will 
be  found  that  the  men  elected  to  these  Councils  will 
not  in  most  cases  be  the  same  persons  who  now 
occupy  the  seats  on  self-appointed  and  non-repre- 
sentative bodies  of  trade  associations.  As  soon  as 
the  trade  association  is  endowed  with  real  powers, 
powers  to  do  good  or  to  do  harm,  as  soon  as  it  is 
recognised  as  an  authority  by  the  Government, 
then  the  great  body  of  traders  who  have  hitherto 
stood  aloof  from  the  association  movement  will  begin 
to  take  an  interest  in  it.  The  serious  men  in  every 
trade,  the  men  whose  lives  are  devoted  to  business, 
will  come  out  into  the  open,  and  most  of  them 
have  far  superior  claims  to  positions  in  the  trade 
authority  than  the  amateurs  to  whom  the  repre- 
sentation of  trade  is  very  largely  left  through 
voluntary  associations.  The  best  men  in  industry 
have  no  time  to  waste,  and  therefore  refuse  to  attend 
association  meetings  where  serious  business  cannot 
be  conducted.  It  may  thus  transpire  that  the 
views  which  have  been  so  loudly  proclaimed  by  self- 
appointed  leaders  of  industry  with  platform  and 
other  ambitions,  are  not  the  views  of  industry  at  all. 

The  very  existence  of  a  Furniture  Trade  Council 
with  a  Furniture  Trade  electorate  at  the  back  of  it 
would  bring  a  vigour,  Uf e,  and  power  to  the  industry 
that  it  could  not  secure  by  any  other  means. 


! 


.! 


; 


III! 


CHAPTER  XXI. 
RECOMMENDATIONS. 

In  my  introductory  chapter  I  outlined  a  system 
of  statutory  Trade  Councils  working  under  a  Minister 
of  Commerce,  which  seems  to  me  to  offer  a  solution 
of  most  of  our  industrial  problems.  Having  en- 
deavoured to  show  in  a  cursory  way  the  need  for 
these  bodies,  and  having  pointed  out  a  few  of 
the  many  fields  which  are  open  to  their  activities, 
it  now  remains  to  set  out  the  suggested  organisa- 
tion rather  more  definitely  and  in  greater  detail. 

It  would  be  idle  to  pretend  that  the  following 
scheme  is  not  full  of  points  which  will  require 
much  discussion.  It  must,  therefore,  be  regarded 
as  a  first  attempt  at  a  working  plan,  and  nothing 
more. 

A.  A  Trade  Franchise. 

The  basis  upon  which  the  whole  scheme  rests 
is  the  introduction  of  the  representative  principle 
into  trade,  and  this  involves  the  estabhshment  of 
a  trade  franchise.  The  exact  form  that  this 
franchise  would  take,  the  exact  qualifications  that 
would  be  necessary  to  it,  and  its  final  working 

222 


RECOMMENDATIONS 


223 


details,  must  be  matter  for  fuller  consideration 
and  debate.  But  the  following  rough  suggestions 
will  at  least  show  that  the  idea  is  not  imwork- 
able. 

..^  I  would  open  out  the  existing  trade  associations 
and  trade  unions  in  much  the  same  way  that 
the  Friendly  Societies  were  opened  out  by  the 
Insurance  Act ;  and  I  would  give  to  every  man 
and  woman  employed  in  an  industry  the  right  to  a 
voting  membership  of  one  or  other  of  these  bodies. 
It  is  obviously  impossible  to  compel  a  trader  to 
join  his  trade  association,  and  it  is  equally  im- 
possible to  compel  a  trade  association  to  admit 
an  individual  to  full  membership.  The  association 
or  the  union  must  have  the  right  of  selecting  its 
own  members  for  its  own  ordinary  purposes,  but 
just  as  the  Insurance  Act  has  multipUed  the  mem- 
bers of  the  Friendly  Societies  without  affecting  the 
rights  and  interests  of  the  original  members,  so 
these  trade  associations  and  unions  might  have  put 
upon  them  the  obhgation  to  admit  to  some  form 
of  limited  membership  any  qualified  individual 
who  appUed.  These  associations  and  imions  would 
thus  secure  the  status  of  Approved  Societies  and 
would  become  Electoral  Colleges  for  the  Trade 
Councils.  The  associations  and  unions  would  then 
become  truly  representative,  and  when  required 
the  real  views  of  an  industry  could  be  ascertained 
through  them. 

All  sorts  of  difficulties  will  arise  in  the  settlement 
of  this  suggested  franchise,  such  questions  as  the 


II 


m 


224         THE  TRADE  OF  TO-MORROW 

right  of  a  limited  company  to  a  vote,  the  position 
of  the  casual  labourer,  the  extension  of  the  vote  to 
unskilled  as  well  as  skilled  workers,  the  difficulty 
of  the  man  who  is  a  builder's  labourer  one  day  and 
a  hop-picker  the  next.  But  these  are  all  details, 
which  are  by  no  means  impossible  of  adjustment. 
In  any  case,  the  trade  franchise  can  have  no  finahty 
about  it.  The  first  arrangement  is  sure  to  fail  to 
meet  with  everybody's  approval,  and  as  industry 
alters  and  conditions  change,  so  there  will  be  a 
constant  need  for  adjustment  of  the  qualification 
for  the  vote. 

When  the  Trade  Council  was  properly  established, 
the  unions  and  associations  would  still  have  much 
work  left  to  them.  In  the  first  place,  they  would 
each  become  a  sort  of  party  caucus  of  the  Trade 
Council,  but  they  would,  in  addition,  act  as  the 
link  between  the  individual  trader  and  the  Council. 
Each  Trade  Councillor  would  be  responsible  to 
his  association  or  his  imion,  and  would  probably 
have  to  answer  to  the  Executive  for  his  actions  or 
his  inactivities. 

B.  The  Trade  Council, 

I  -have  continually  referred  throughout  this  book 
to  the  need  for  Trade  Councils,  and  the  question 
arises  as  to  how  they  are  to  be  brought  into  being. 
It  is  obvious  that  this  can  only  be  accomplished 
by  the  Government. 

The  necessary  Act  of  Pariiament  establishing 
the  Ministry  of  Commerce  and  the  Trade  Councils 


RECOMMENDATIONS 


225 


would  probably  be,  in  the  first  place,  a  permissive 
Act. 

I  would  give  to  any  association,  society,  or 
union  the  right  to  apply  to  the  Minister  of  Commerce 
to  have  its  trade  brought  within  the  scheme  and 
a  Trade  Council  constituted.  On  receipt  of  such 
an  application,  the  Minister  of  Commerce  would 
hear  the  case,  and  if  he  were  satisfied  that  the 
appUcants  were  of  sufficient  standing,  he  would 
advertise  his  intention  to  set  up  a  Statutory  Trade 
Council  in  that  industry. 

Every  other  union  or  society  having  interests 
which  would  thus  be  concerned,  would  then  have 
the  opportunity  of  becoming  Approved  Societies 
for  the  purposes  of  the  election  of  the  proposed 
Trade  Council.  The  Minister  of  Commerce  would 
then  adjust  the  interests  of  each  of  these  societies, 
giving  to  them  voting  power  in  proportion  to  the  ^ 
strength  of  their  membership.  The  voting  power 
would  be  divided  into  halves,  one  for  capital  and 
the  other  for  labour,  and  would  be  distributed 
between  the  employers'  associations  and  the  labour 
unions  in  their  proper  proportions.  The  trade 
would  thus  become  a  recognised  industry  in  much 
the  same  way  that  a  parish  becomes  a  borough  or 
a  borough  a  city. 

Having  adjusted  all  the  interests  in  the  way 
described,  the  Minister  of  Commerce  would  then 
appoint  returning  officers  to  direct  the  election 
of  the  first  Trade  Council. 

It  will  be  noticed  that  one  great  difficulty  has 


HI 


226        THE  TRADE  OF  TO-MORROW 


been  overcome  by  these  processes  in  connection 
with  the  selection  of  trades.  For  in  this  way  a 
sort  of  natural  selection  would  develop,  and  the 
resulting  recognised  trades  would  in  all  probability 
make  a  very  different  list  from  any  schedule  which 
the  authorities  might  compile  of  our  leading  in- 
dustries. For  instance,  Cotton  might  have  one  or 
two  Trade  Councils.  The  cotton  industry  might 
come  to  the  conclusion  that  it  could  work  better 
with  one,  or  the  spinning  and  weaving  branches 
might  prefer  to  work  independently.  Engineering 
might  have  twenty  Trade  Councils,  and,  indeed,  it 
is  likely  that  something  of  the  kind  would  happen. 
These  difficulties  which  have  baffled  so  many  en- 
thusiasts in  the  federation  of  so  varied  an  industry 
would  be  overcome.  As  new  trades  arose  new 
Trade  Councils  would  become  necessary,  and  as 
the  character  of  trades  altered  so  Trade  Councils 
might  be  amalgamated  or  reconstituted. 

C.  The  Minister  of  Commerce. 

In  the  foregoing  it  will  be  obvious  that  there 
is  a  great  deal  of  work  which  would  fall  upon  the 
shoulders  of  the  Minister  of  Commerce  merely  in 
the  regularisation  of  all  these  proceedings.  The 
greatest  objection  to  the  appointment  of  a  Minister 
of  Commerce  would  be  overcome  if  his  appointment 
were  accompanied  with  the  setting  up  of  numerous 
Trade  Councils.  There  would  then  be  no  fear  that 
the  Minister  might  take  upon  himself  to  interfere 
with  industry  without  proper  advice.     We  should 


'  •n 


RECOMMENDATIONS 


227 


be  free  from  any  risk  of  the  repetition  of  our  war- 
time experiences,  or  of  the  serious  damage  resulting 
to  trade  and  commerce  through  the  operations 
of  Government  Departments. 

The  work  of  the  Minister  of  Commerce  would  be 
to  set  up  Trade  Councils,  to  regularise  their  pro- 
ceedings, to  supervise  the  registration  for  the  trade 
franchise,  and  to  give  effect  to  the  recommenda- 
tions of  Trade  Councils  and  bring  those  recommenda- 
tions before  the  notice  of  other  Departments  and 
other  Governments.  He  would  not  be  expected 
to  initiate  trading  schemes,  or  to  touch  the  details 
of  trading  matters  at  all. 

The  scheme  would  bring  about  another  great 
improvement  in  our  present  arrangements.  It 
would  clearly  define  the  spheres  and  activities  of 
the  official  and  of  the  business  man.  The  official 
would  have  ample  scope  for  the  exercise  of  all  his 
abilities  at  the  Ministry  of  Commerce  on  work 
which  he  and  he  alone  could  do,  while  the  business 
man  would  be  relegated  to  the  Trade  Council, 
where  his  knowledge  and  experience  would  have 
every  opportunity  for  useful  work. 

The  Ministry  of  Commerce  would,  as  I  have  sug- 
gested in  "Trade  as  a  Science,"  divide  itself  into 
six  or  seven  departments,  dealing  with  the 
main  branches  of  the  work  of  the  Trade  Councils. 
There  would  have  to  be  a  number  of  Under 
Secretaries,  handling  such  specialised  subjects  as 
education,  research,  export,  statistics,  finance,  wel- 
fare, and  exhibitions.    Each  of  these  departments 


if 


fi 


■ 


228    .    THE  TRADE  OF  TO-MORROW 

would  endeavour  to  establish  in  each  Trade  Council 
corresponding  departments,  so  that  every  industry 
would  possess  a  perfect  organisation  for  handling 
these  great  subjects.  In  this  way  the  following  situa- 
tion would  arise  in  connection  with,  say,  Export. 

There  would  be  at  the  Ministry  of  Commerce  an 
Export  Department  and  an  Export  Secretary, 
whose  duties  would  be  to  co-ordinate  the  efforts 
of  the  Export  Officers  of  different  trades.  There 
would  be  an  Export  Committee  and  an  Export 
Officer  for  every  industry,  and  each  industry  would 
be  able  to  deal  with  the  problems  of  exportation 
in  a  way  that  would  overcome  the  special  difficulties 
of  each  trade.  The  efforts  of  all  these  Export 
Officers  would  be  co-ordinated  and  regulated  by 
the  Central  Department  at  the  Ministry  of  Com- 
merce. We  should  remove  the  greatest  weakness 
of  our  present  attempts  to  assist  export,  the  weak- 
ness which  arises  from  deaUng  with  all  trades  at  once. 

D.  Officials  of  the  Trade  Council. 

It  is  obvious  that  the  scheme  which  we  are  con- 
sidering involves  the  appointment  of  great  numbers 
of  officials.  The  suggestion  is  that  every  trade 
would  require  a  complete  organisation  of  its  own, 
with  officials  at  home  and  officials  abroad.  There 
are  very  few  British  industries  which  are  not  worth 
the  undivided  attention  of  an  expert  selling  staff 
in  every  market  abroad.  In  this  way  we  should 
have  in  the  Argentine  fifty  different  staffs  of  trade 
experts  looking  after  the  interests  of  fifty  different 


RECOMMENDATIONS 


229 


trades.  It  does  not  follow  that  there  would  be 
more  men  in  the  Argentine  on  behalf  of  British 
trade  than  there  are  at  the  moment,  but  instead 
of  the  men  who  are  there  being  in  direct  opposition 
to  one  another,  exhibiting  the  dirty  linen  of  the 
English  cpmpetitive  system  to  the  gaze  of  the 
Argentine  buyer,  we  should  have  the  work  so  re- 
arranged that  each  man  would  be  able  to  speak  on 
behalf  of  the  whole  of  the  industry  in  which  he  was 
interested. 

There  would  be  no  fear  of  these  positions  assum- 
ing the  character  of  permanent  pubhc  appointments, 
or  of  these  officials  acquiring  the  habits  of  the 
employee  in  a  Government  Department.  They 
would  all  be  commercial  appointments.;  they  would 
be  made  by  Trade  Councils  composed  of  experts; 
they  need  have  no  more  fixity  of  tenure  or  con- 
tinuity about  them  than  the  ordinary  commercial 
appointment  of  to-day.  In  fact,  the  type  of  man 
who  would  apply  for  most  of  these  positions  w^ould 
probably  not  consent  to,  or  desire,  arrangements 
which  had  any  finahty  about  them.  The  position 
of  representative  in  Chili  for  the  Boot  Trade  Council 
would  only  be  accepted  by  some  man  of  high 
commercial  ambition,  and  would  probably  be  re- 
garded by  him  as  a  stepping-stone  to  something 
else.  He  would  probably  require  some  arrange- 
ment for  payment  by  results,  and,  indeed,  his 
emolument  in  any  case  would  have  to  bear  some 
relation  to  the  success  of  his  efforts.  The  higher 
grade   of  business  man,  to  whom  all  these  posts 


•I"'"' 


230        THE  TRADE  OF  TO-MORROW 

would  appeal,  is  not  prepared  to  be  bound,  and  is 
not  looking  for  a  pension,  and  there  is,  therefore, 
no  reason  why  any  of  these  offices  under  Trade 
Councils  should  be  treated  in  the  same  way  as  a 
position  in  the  Treasury  or  the  Post  Office. 

E.  Finance, 

The  Trade  Council  will,  of  course,  require  money. 
This  is  a  subject  which  I  have  purposely  left  un- 
explored. It  will  be  seen  that  in  principle  there  is 
no  reason  why  the  Government  should  not  provide 
the  whole  of  the  money  that  is  necessary  for  the 
running  of  a  Trade  Council.  If  that  Council  is 
representative  of  the  whole  industry,  if  its  object  is 
the  welfare  of  all  engaged  in  that  industry,  if  it  is 
charged  by  the  Government  with  the  duty  of  watch- 
ing the  national  interests  in  so  far  as  they  concern 
that  industry,  there  is  a  full  case  for  the  payment 
by  the  Treasury  of  all  its  expenses.  Indeed,  a 
good  many  of  the  expenses  which  it  would  direct 
or  control  are  already  paid  by  the  Government. 
Research,  education,  statistics  in  the  shape  of 
Board  of  Trade  Returns,  and  other  similar  matters 
which  would  come  under  the  control  of  the  Trade 
Council,  are  already  provided  with  public  funds. 
But  here,  again,  new  conditions  would  arise,  and 
it  would  in  all  probability  be  found  that  an  in- 
dustry would  not  consent  to  be  entirely  dependent 
upon  the  Minister  of  Commerce  for  the  funds 
which  its  Council  would  control. 

I  am  inchned  to  think  that  finance  would  not 


RECOMMENDATIONS 


231 


in  any  case  prove  a  barrier  to  success  in  these 
matters.  Business  men  are  never  unwilling  to  find 
the  money  for  any  good  scheme. 


In  conclusion,  I  submit  the  foregoing  suggestions 
as  a  broad,  rough  basis  for  the  solution  of  the  great 
problem  of  Industrial  Reconstruction.  They  are 
obviously  capable  of  improvement  and  indefinite 
amplification,  but  they  represent  the  lines  along 
which  we  must  travel.  I  can  at  least  clairii  that 
my  scheme,  in  principle,  if  not  in  detail,  overcomes 
many  of  the  difficulties  ahead  of  us. 

(i)  It  deals  with  the  task  in  a  fundamental 

way,  and  is  not  a  patchwork  or  temporary 

expedient. 

(2)  It  puts  the  politician,  the  official,  and 

the  business  man,  each  in  his  proper 
sphere,  and  thus  avoids  the  most  dis- 
astrous of  our  war-time  blunders — the 
mixing  of  the  functions  of  these  three 
classes. 

(3)  It    renders    unnecessary    great    central 

Government  trading  schemes  which, 
however  vast,  must  always  be  insigni- 
ficant in  relation  to  the  trade  of  our 
Empire. 

(4)  It  repairs  the  inadequacies  of  our  indi- 
vidualistic system  without  destroying 
its  quaUties. 

(5)  It  ensures  a  close  study  by  experts  of 
every   one   of    our   productive   trades. 


'  i 


232        THE  TRADE  OF  TO-MORROW 

each  trade  as  a  whole,  and  provides  for 
its  fullest  development. 

(6)  It  gives  an  official  status  to  trade,  and 

reheves  it  of  the  social  stigma  which  has 
been  such  a  handicap. 

(7)  It  enlists  the  sympathies  and  energies  of 

labour  on  behalf  of  the  nation's  trade. 

(8)  It  removes  the  feeling  of  inequality  of 

status,    which    is    the    main    cause    of- 
labour  unrest. 

(9)  It  places  us  in  a  position  to  compete 

with  other  industrial  nations. 

(10)  It  is  the  embodiment  of  all  that  is  best 

in  the  German  and  American  industrial 
scheme,  and  avoids  the  abuses  of  Car- 
tels and  Trusts. 

(11)  It  gives  the   maximum   of   opportunity 

for  individual  effort,  and  provides  a 
chance  for  every  master  and  workman 
to  share  in  the  nation's  responsibilities. 

(12)  It  makes  our  industries  a   part   of   our 
Constitution. 

I  would  not  dare  to  make  such  claims  if  I  were 
the  author  of  these  ideas.  But  readers  will  have 
noticed  from  the  numerous  quotations  I  have  given 
that  many  brains  have  thought  these  questions 
out,  and  all  that  I  have  done  is  to  endeavour  to 
frame  from  their  deliberations  and  conclusions  a 
definite  and,  as  it  seems  to  me,  a  practical  policy 
for  British  Trade. 


Printed  by  Jmrrdd  &-  Sons,  Ltd.,  Norwich,  England. 


-^^ 


Date  Due 


MA> 


'¥ 


Ff  B  ?  «^  1994 


Uf 


■^m 


COLUMBIA  UNIVERS  TY  LIBRARIES 


^-. 


0044257295 


JH^  *■ 


j1i28 


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TITLE 


